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: For the Four Quarters Ending December 31 Quarter 1 Quarter 2 5,300 5,800 A$580,000 A$530,000 A$656,000 348,000 318,000 393,600 232,000 212,000 262,400 Sales in units Sales revenue Less: Cost of goods sold Gross margin Less: Operating expenses: Advertising expense Shipping expense Salaries and commissions Insurance expense Depreciation expense MORRISEY & BROWN, LTD. Income Statements Total operating expenses Net income 22,300 41,200 80,600 Quarter 3 Quarter 4 6,560 5,900 22,300 39,200 85,800 7,300 7,300 16,300 16,300 170,900 167,700 AS 61,100 A$ 44,300 A$ 74,540 22,300 46,240 95,720 7,300 16,300 187,860 A$590,000 354,000 236,000 22,300 40,940 92,540 7,300 16,300 179,380 A$ 56,620 (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$.) 3. Redo the company's income statement at the 6,560-unit level of activity using the contribution format MORRISEY & BROWN, LTD. Contribution Margin Income Statement For the Quarter Ended September 30 Sales in units Less Variable expenses Less Fixed expenses AS A$ A$ 0 0 0 4. Assume that the company's sales are projected to be 5,150 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$ 0 0 0. 0