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: 2 Sales in units MORRISEY & BROWN, LTD. Income Statements For the Four Quarters Ending December 31 Quarter 1 6,500 Sales revenue Less: Cost of goods sold Gross margin Less: Operating expenses: Advertising expense Shipping expense Salaries and commissions Insurance expense Depreciation expense Total operating expenses Net income Quarter 2 6,000 A$650,000 A$600,000 Quarter 3 Quarter 4 7,400 A$740,000 6,600 A$660,000 390,000 360,000 444,000 396,000 260,000 240,000 296,000 264,000 23,000 23,000 23,000 23,000 42,000 44,000 49,600 43,600 90,000 82,000 98,800 96,600 8,000 8,000 8,000 8,000 17,000 17,000 17,000 17,000 180,000 174,000 196,400 188,200 A$ 80,000 A$ 66,000 A$ 99,600 A$ 75,800 (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$.) Required: 1. Identify each of the company's expenses (including cost of goods sold) as being variable, fixed, or mixed. 2-a. Using the high-low method, separate each mixed expense into variable and fixed elements. Variable Cost A$ per unit A$ A$ per unit A$ A$ per unit A$ Fixed Cost eBook 2-b. Using the high-low method, state the cost formula for each mixed expense. Y= A$ + A$ Y= A$ + A$ Y= |A$ +A$ X XX X 02:28:16 eBook 3. Redo the company's income statement at the 7,400-unit level of activity using the contribution format. MORRISEY & BROWN, LTD. Contribution Margin Income Statement For the Quarter Ended September 30 Sales in units Less: Variable expenses. Less Fixed expenses: A$ A$ SF A$ R 02:28:03 eBook 4. Assume that the company's sales are projected to be 5,500 units in the next quarter. Prepare a contribution margin income statement. Sales in units MORRISEY & BROWN, LTD. Contribution Margin Projected Income Statement For the Quarter Ended March 31 Less Variable expenses Less Fixed expenses: A$ A$ A$