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Milder Company is a distributor who wants to start using a contribution format income statement for planning purposes. The company has analyzed its expenses and
Milder 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 $23 per unit sold Advertising expense $173,000 per quarter Sales commissions 6% of sales Shipping expense ? Administrative salaries $83,000 per quarter Insurance expense $9,300 per quarter Depreciation expense $53,000 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 19,000 $ 163,000 Second 21,000 $ 178,000 Third 26,00
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