Question
Morrisey & Brown, Limited, of Sydney is a merchandising company that is the sole distributor of a product that is increasing in popularity among
Morrisey & Brown, Limited, of Sydney is a merchandising company 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: Sales in units Sales Morrisey & Brown, Limited Income Statements For the Three Months Ended September 30 July 5,000 August 5,500 September 6,000 Cost of goods sold $ 625,000 375,000 Insurance expense Gross margin Selling and administrative expenses: Advertising expense Shipping expense Salaries and commissions Depreciation expense 250,000 $ 687,500 412,500 275,000 $ 750,000 450,000 300,000 22,800 22,800 22,800 46,000 48,800 51,600 92,000 98,400 6,050 6,050 24,700 Total selling and administrative expenses 191,550 24,700 200,750 104,800 6,050 24,700 209,950 $ 58,450 $ 74,250 $ 90,050 Net operating income Required: 1. By analyzing the data from the company's income statements, classify each of its expenses (including cost of goods sold) as either variable, fixed, or mixed. 2. Using the high-low method, separate each mixed expense into variable and fixed elements. Express the variable and fixed portions of each mixed expense in the form Y = a + bx. 3. Redo the company's income statement at the 6,000-unit level of activity using the contribution format. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Redo the company's income statement at the 6,000-unit level of activity using the contribution format. Morrisey & Brown, Limited < Prev 4 of 4 Next >
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