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 companys income statements for the three most recent months follow:

Morrisey & Brown, Ltd.

Income Statements

For the Three Months Ended September 30

July August September

Sales in units 9,000 9,500 10,000

Sales $ 945,000 $ 997,500 $ 1,050,000

Cost of goods sold 567,000 598,500 630,000

Gross margin 378,000 399,000 420,000

Selling and administrative expenses:

Advertising expense 30,800 30,800 30,800

Shipping expense 130,000 136,000 142,000

Salaries and commissions 165,000 173,000 181,000

Insurance expense 10,950 10,950 10,950

Depreciation expense 17,300 17,300 17,300

Total selling and administrative expenses 354,050 368,050 382,050

Net operating income $ 23,950 $ 30,950 $ 37,950

Required:

1. By analyzing the data from the company's income statements, classify each of its expenses (including cost of goods sold) as 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.

Complete this question by entering your answers in the tabs below. Required 1 Required 2 By analyzing the data from the company's income statements, classify each of its e either variable, fixed, or mixed. Classification Expenses Cost of goods sold Advertising expense Shipping expense Salaries and commissions Insurance expense Depreciation expense Ragusad 2 Complete this question by entering your answers in the tabs below. Required 1 Required 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. (Round the Variable cost per unit to 1 decimal place.) Variable Cost Fixed Cost Formula per unit Y= per unit