Morrisey & Brown, Ltd. of Sydney is a merchandising company 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 Three Months Ended September 38 July August September Sales in units 7.750 8,250 8.750 Sales 775,000 $825, een $875.ee Cost of goods sold 465,000 495,00 525,000 Gross margin 310, eee 330,000 350,000 Selling and administrative expenses Advertising expense 28,200 28, 200 28,200 Shipping expense 89,500 94,500 99,500 Salaries and commissions 140,000 147, see 155,000 Insurance expense 7,200 7. 200 7,200 Depreciation expense 21,600 21,600 21,600 Total selling and administrative expenses 286,500 299,000 311,500 Net operating income $ 23, see $ 31,000 $ 38,500 Required: 1. By analyzing the data from the company's income statements, classify each of its expenses (including cost of goods sold) os either variable, fixed, or mixed. 2. Using the high-low method, separate each mixed expense into variable and fixed elements. Express the variable and fixed portions of each mixed expense in the form Y=a.bX 3. Redo the company's income statement at the 8,750-unit level of activity using the contribution format