Morrisey & Brown, Ltd., of Sydney, Australia, is a merchandising rm 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: I'DRRISEY & BROIIIN, LTD. Income Statements For the Fear Quarters Ending December 31 Quarter 1 Quarter 2 Quarter 3' Quarter A Sales in units 6,166 5,666 6,926 6,266 Sales revenue A$61666 M566,666 $692,666 A$626,666 Less: Cost of goods sold 366,666 336,66I 415,266 372,I66 E-Bcgk Gross margin 244,906 224,996 276,869 248,668 Less: Operating expenses: Advertising expense 22,666 22,66I 22,666 22,666 Shipping expense 46,566 12,466 47,666 42,686 Salaries and commissions 87,666 81,266 97,646 94,286 Insurance expense 7,566 7,566 7,566 7,666 Depreciation expense 16,666 16,666 16,666 16,666 Total operating expenses 174,866 176,466 191,526 183,166 Net income A5 59,266 As 53,566 As 85,286 A$ 54,846 (Note: Morrisey & Brown, Ltd's Australianformatted income statement has been recast into the format common in Canada. The Australian dollar is denoted by A$.) Required: 1. Identify each ofthe company's expenses (including cost of goods sold) as being variable, fixed, or mixed. Cost of goods sold Advertising expense Required: 3 1. Identify each of the company's expenses (including cost of goods sold) as being variable, fixed, or mixed. Expenses Classification Cost of goods sold Advertising expense 8 02:19:30 Shipping expense Salaries and commissions Insurance expense eBook Depreciation expense 2-a. Using the high-low method, separate each mixed expense into variable and fixed elements. Variable Cost Fixed Cost AS per unit A$ A$ per unit A$ AS per unit A$3 2-b. Using the highlow method, state the cost formula for each mixed expense, eBook 3. Redo the company's income statement at the 6,9207uni't level of activity using the contribution format, Sales in units Less: Variable expenses: E 3. Redo the company's income statement at the 6,920-unit level of activity using the contribution format. 3 MORRISEY & BROWN, LTD. Contribution Margin Income Statement For the Quarter Ended September 30 8 Sales in units 02:18:34 A$ Less: Variable expenses: eBook A$ Less: Fixed expenses: AS 4. Assume that the company's sales are projected to be 5,300 units in the next quarter. Prepare a contribution margin income3 4. Assume that the company's sales are projected to be 5,300 units in the next quarter. Prepare a contribution margin income statement. eBook Less: Variable expenses: A$ . * Sales in units * Less: Fixed expenses: . . *