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: Sales in units. Sales revenue Less: Cost of goods sold Gross margin Less: Operating expenses: For the Four Quarters Ending December 31 Quarter 1 Quarter 2 5,200 4,700 A$520,000 A$470,000 312,000 282,000 208,000 188,000 Advertising expense Shipping expense Salaries and commissions Insurance expense Depreciation expense Total operating expenses Net income MORRISEY & BROWN, LTD. Income Statements Required: Quarter 3 5,840 A$584,000 350, 400 233,600 21,700 36,800 82,200 6,700 15,700 163,100 A$ 44,900 A$ 25,700 A$ 53,060 21,700 38,800 79,400 6,700 15,700 162,300 21,700 43,360 93,080 6,700 15,700 180, 540 Quarter 4 5,300 A$530,000 318,000 212,000 21,700 38,660 89,060 6,700 15,700 171,820 A$ 40,180 4 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$.)

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: Note: Morrisey \& Brown, Lid's Australlan-formatted income statement has been recast into the format common in Canada. The Australian dollar is denoted by A$.) 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: (Nole: Morrisey \& Brown, Ltd's Australian formatted income statement has been recast into the format common in Canada. The Australlan 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. 1. 2-a. Using the high-low method, separate each mixed expense into variable and fixed elements. 2-b. Using the high-low method, state the cost formula for each mixed expense. 3. Redo the company's income statement at the 5,840-unit level of activity using the contribution format. 4. Assume that the company's sales are projected to be 4,850 units in the next quarter. Prepare a contribution margin income statement