Morrisey & Brown , Led . , of Sydney , Australia , is a merchandising firm that is the sole distributor of a product that is increasing in popularity among Australian consumers . The company's income statements for the three most recent months follow :" MORRISEY & BROWN , LTD . Income Statements For the Three Months Ending September 30 July August September Sales in units 5, 000 5, 500 6, 000 Sales revenue A$ 520 , 000 A$ 572 , 000 A$ 624 , 000 Less : Cost of goods sold 310 , 000 341, 000 372, 000 Gross margin 210, 000 231 , 000 252, 000 Less : Operating expenses :" Advertising expense 22 , 000 22, 000 22 , 000 Shipping expense 38 , 000 40 , 000 41 , 800 Salaries and commissions 84, 000 90 , 000 95, 800 Insurance expense 7,000 7, 000 7, 000 Depreciation expense 16, 000 16, 000 16, 000 Total operating expenses 167 , 000 175 , 000 182 , 600 Net income A$ 43, 000 A$ 56, 000 A$ 69, 400 ( Note : Morrisey & Brown , Led . 'S Australian-formatted income statement has been recast into the format common in Canada . The Australian dollar is denoted by AS. ) Required :" 1 . Identify each of the company's expenses ( including cost of goods sold ) as being variable , fixed , or mixed .Required :` 1 . Identify each of the company's expenses ( including cost of goods sold ) as being variable , fixed , or mixed . Expenses Classification Cost of goods sold Advertising expense Shipping expense* Salaries and commissions Insurance expense Depreciation expense 2 - 2 . Using the high- low method , separate each mixed expense into variable and fixed elements . ( Do not round intermediate calculations . Round the " Fixed cost " to the nearest dollar amount and " Variable cost " to 2 decimal places . ) Variable Cost Fixed Cost AS per unit | AS AS per unit | AS AS per unit| AS2 - 6 . Using the high-low method , state the cost formula for each mixed expense . ( Do not round intermediate calculations . Round the " X " answers to 2 decimal places . ) Y = | AS + | AS X Y = |AS AS X Y =\\AS |AS X3. Redo the company's income statement at the 6 , 000 - unit level of activity using the contribution format . MORRISEY & BROWN , LTD . Income Statement For the Month Ended September 30 Sales in units 6, 000 AS Less : Variable expenses :" AS Less : Fixed expenses. AS