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 Monthe Ended September 30 July August September Sales in units 8,250 8,750 9,250 Sales $ 783,750 $ 831,250 $ 878,750 Cost of goods sold 470,250 498,750 527,250 Gross margin 313,500 332,500 351,500 Selling and administrative expenses: Advertising expense 25,400 25,400 25,400 Shipping expense 102,500 107,900 113,300 Salaries and commissions 150,000 157,700 165,400 Insurance expense 7,350 7,350 7,350 Depreciation expense 21,400 21,400 21,400 Total selling and administrative experies 306,650 319,750 332,850 Net operating income $ 6,850 $ 12,750 $ 18,650 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 Yua+bX. 3. Redo the company's income statement at the 9,250-unit level of activity using the contribution format. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Check my work Vic 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 9,250-unit level of activity using the contribution format. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 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 Shipping expense per unit Y Salaries and commissions expense per unit X X Y = Redo the company's income statement at the 9,250-unit level of activity using the contribution format. $ 878,750 Morrisey & Brown, Ltd. Income Statement For the Month Ended September 30 Sales Variable expenses Cost of goods sold $ 527,250 Selling expenses 99,900 Salaries and commissions expense 142,450 769,600 109,150 $ 13,400 Contribution margin Fixed expenses: Shipping expense Salaries and commissions expense Advertising expense Insurance expense Depreciation expense 22,950 25,400 7,350 21,400 90,500 18,650 Net operating income $ RA Drew 2 of 4 Next >
