Milden Company is a distributor who wants to start using a contribution format income statement for planning purposes. The company has analyzed its expenses and developed the following cost formulas:

Cost	Cost Formula
Cost of good sold	$29 per unit sold
Advertising expense	$179,000 per quarter
Sales commissions	8% of sales
Shipping expense	?
Administrative salaries	$89,000 per quarter
Insurance expense	$9,900 per quarter
Depreciation expense	$59,000 per quarter

Because shipping expense is a mixed cost, the company needs to estimate the variable shipping expense per unit sold and the fixed shipping expense per quarter using the following data:

Quarter	Units Sold	Shipping Expense
Year 1:
First	25,000	$	169,000
Second	27,000	$	184,000
Third	32,000	$	226,000
Fourth	28,000	$	189,000
Year 2:
First	26,000	$	179,000
Second	29,000	$	194,000
Third	37,000	$	241,000
Fourth	34,000	$	217,000

Required:

1. Using the high-low method, estimate a cost formula for shipping expense in the form Y = a + bX.

2. In the first quarter of Year 3, the company plans to sell 33,000 units at a selling price of $59 per unit. Prepare a contribution format income statement for the quarter.