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 30 July Sales in units 6,250 Sales $ 656, 250 Cost of goods sold 393,750 Gross margin 262,500 Selling and administrative expenses: Advertising expense 36,600 Shipping expense 62,500 Salaries and commissions 115,000 Insurance expense 9,100 Depreciation expense 16,900 Total selling and administrative expenses 240, 100 Net operating income $ 22,400 August 6,750 $ 708, 750 425, 250 283,500 September 7,250 $ 761,250 456,750 304,500 36,600 66,300 121,900 9,100 16,900 250, 800 $ 32,700 36,600 70, 100 128,800 9,100 16,900 261,500 $ 43,000 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. 3. Redo the company's income statement at the 7,250-unit level of activity using the contribution format