Morrisey & Brown, Ltd., 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: Sales in units Sales revenue MORRISEY & BROWN, LTD. Income Statements For the Four Quarters Ending December 31 Quarter 1 Quarter 2 Quarter 3 Quarter 4 4,800 4,300 A$480,000 A$430,000 Less: Cost of goods sold Gross margin 5,360 A$536,000 A$490,000 288,000 258,000 321,600 294,000 192,000 172,000 214,400 196,000 4,900 Less: Operating expenses: Advertising expense 21,300 21,300 21,300 21,300 Shipping expense 35,200 37,200 41,440 37,140. Salaries and commissions 79,800 78,600 91,320 86,740 Insurance expense 6,300 6,300 6,300 6,300 Depreciation expense 15,300 15,300 15,300 15,300 Total operating expenses 157,900 158,700 175,660 166,780 Net income A$ 34,100 A$ 13,300 A$ 38,740 A$ 29,220 (Note: Morrisey & Brown, Ltd.'s Australian-formatted income statement has been recast into the format common in Canada. The Australian dollar is denoted by A$.) Required: 1. Identify each of the company's expenses (including cost of goods sold) as being variable, fixed, or mixed. Expenses Classification 2-b. Using the high-low method, state the cost formula for each mixed expense. Shipping expense Y= A$ AS X Salaries and commissions expense Y A$ AS X Y= AS A$ x stiuibucing the contribution format. 4. Assume that the company's sales are projected to be 4,650 units in the next quarter. Prepare a contribution margin income statement. Sales in units Sales revenue MORRISEY & BROWN, LTD. Contribution Margin Projected Income Statement For the Quarter Ended March 31 Less: Variable expenses: Cost of goods sold Shipping expense Salaries and commissions expense Contribution margin Less: Fixed expenses: Advertising expense Shipping expense Salaries and commissions expense Insurance expense Depreciation expense Net income A$ 4,650 AS 0 0 0 0 AS 0 4. Assume that the company's sales are projected to be 4,650 units in the next quarter. Prepare a contribution margin income statement. Sales in units Sales revenue MORRISEY & BROWN, LTD. Contribution Margin Projected Income Statement For the Quarter Ended March 31 Less: Variable expenses: Cost of goods sold Shipping expense Salaries and commissions expense Contribution margin Less: Fixed expenses: Advertising expense Shipping expense Salaries and commissions expense Insurance expense Depreciation expense Net income A$ 4,650 AS 0 0 0 0 AS 0