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 1 Quarter 2 Quarter 3 Quarter 4 Sales in units 5,200 4,700 5,840 5,300 Sales revenue A$ 520,000 A$470,800 A3584,000 Less: Cost of goods sold AS 530,000 312,000 282,000 350,400 318,000 Gross margin 288,000 188,000 233,600 212.000 Less: Operating expenses: Advertising expense 21,700 21,700 21,700 21,700 Shipping expense 36,800 38,800 43,368 Salaries and commissions 38,660 82,280 79,400 93,00 89,060 Insurance expense 5,789 6, 780 6,700 6,700 Depreciation expense 15,700 15,700 15,00 15,280 Total operating expenses 163, 100 162,300 180.540 171,820 Net income AS 44,9ee A$ 25,700 AS 53,060 AS 48,180 (Note: Morrisey & Brown. Ltd.'s Australian-formatted income statement has been recast into the format common in Canada. The Australian dollar is denoted by AS.) Required: 1. Identify each of the company's expenses (including cost of goods sold) as being variable, fixed, or mixed. Classification Expenses Cost of goods sold Advertising expense Shipping expense Salaries and commissions Insurance expense 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 AS A$ A$ per unit A$ per unit AS 2-b. Using the high-low method, state the cost formula for each mixed expense. Y= AS + AS Y= AS + AS YE AS + AS 3. Redo the company's income statement at the 5,840-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: Fbced expenses: w AS 4. Assume that the company's sales are projected to be 4,850 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 Less: Variable expenses: AS Less: Faced expenses AS