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; MORRISEY & BROWN, LTD. Income Statements For the four Quarters Ending December 31 Quarter Quarter 2 Quarter 3 Quarter a Sites in units 6,689 5,500 6.800 6,100 Sales revenue AS600,000 AS550,000 AS680,000 A$610.000 Less: Cost of goods sold 360,000 330,000 488,000 366,00 Gross margin 240,000 220,000 272,800 244,000 Less! Operating expenses: Advertising expense 22.500 22,500 22,500 22,50 Shipping expense 40,000 42,000 47,200 41,700 Salaries and commissions 87,000 81,000 96,600 93,700 Insurance expense 7.500 7.500 7.500 7,500 Depreciation expense 16500 16.500 16,500 16,500 Total operating expenses 17.500 169 300 190,300 181,900 Net Income AS 66,500 50.500 A 81.780 AS 62.100 (Note, Morrisey & Brown, Lid's Australian formatted income statement has been recast into the format common in Canada. The Australian dollar is denoted by A$) Required: 1. Identity each of the company's expenses (including cost of goods sold) on being variable, fixed, or mixed Classification Expenses Cost of goods sold Advertising Syngen Salaries and common Insurance expense Depreciation 2-a. Using the high-low method, separate each mixed expense into variable and fixed elements. Fixed Cost A$ AS A$ Variable Cost per unit per unit per unit A$ AS AS 2-b. Using the high-low method, state the cost formula for each mixed expense. Y AS Y AS Ys AS - A$ - AS +AS X X X 3. Redo the company's income statement at the 6,800-unit level of activity using the contribution format. MORRISEY & BROWN, LTD. Contribution Margin Income Statement For the Quarter Ended September 30 Sales in units AS Less: Variable expenses: AS Less: Fixed expenses AS 4. Assume that the company's sales are projected to be 5.250 units in the next quarter. Prepare a contribution margin income statement MORRISEY & BROWN, LTD Contribution Margin Projected Income Statement For the Quarter Ended March 31 Sales in units AS Loss: Variable expenses AS Less Fixed expenses AS