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Morrisey & Brown, Lt., of Sydney is a merchandising company that is the sole distributor of a product that is increasing in popularity among Australian
Morrisey & Brown, Lt., 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: Morrisey& Brown, Ltd. Income Statements For the Three Months Ended September 30 July August September Sales in units 9,000 9,500 10,000 $1,050,000 630,000 945,000 567,000 Sales 997,500 598,500 Cost of goods sold Gross margin Selling and administrative expenses: Advertising expense Shipping expense 378,000 399,000 420,000 30,800 130,000 165,000 10,950 17,300 354,050 30,800 30,800 136,000 173,000 10,950 142,000 181,000 10,950 Salaries and commissions Insurance expense Depreciation expense Total selling and administrative expenses 17,300 17,300 382,050 368,050 37,950 23,950 30,950 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 10,000-unit level of activity using the contribution format. Complete this question by entering your answers in the tabs below. Required 2 Required 1 Required 3 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 Expenses Classification Cost of goods sold Advertising expense Shipping expense Salaries and commissions Insurance expense Depreciation expense Complete this question by entering your answers in the tabs below. Required 1 Required 3 Required 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. (Round the Variable cost per unit to 1 decimal place.) Variable Cost Fixed Cost Formula Y = X per unit Y = per unit X
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