oorenis 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: MORSEYRON, CID Income Statement For the Four Quarters Ending December 31 Quarter 1 Quarter 2 Sales in units 4,900 4,400 Sales revenue A$ 490,000 $140,000 Less: Cost of goods sold 294,000 264,00 Gross margin 196.000 126,00 Less: Operating expenses: Advertising expense 21,400 21,400 Shipping expense 35,600 37,600 Salaries and commissions 80,400 78,00 Insurance expense 6,400 6,480 Depreciation expense 15,400 15.400 Total operating expenses 159, 200 159,600 Net income A$ 36,800 $ 16,400 5,480 A$548,000 328,888 219,200 Quarter 5,000 A$ 500,000 389, 890 290, 21,400 41,920 91,760 6,400 15,400 176,880 AS 42,320 21,400 37,520 87,320 6,400 15,400 168,840 A$ 31,960 (Note: Morrisey & Brown, Ltd.'s Australian-formatted income statement has been recast into the format common in Canada. The Australian 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 Expenses Cost of goods sold Advertising expense Shipping expense Salaries and commissions Insurance expense Classification Variable Fixed Mixed Mixed Fixed Prey 4 of 6 Next > 2-a. Using the high-low method, separate each mixed expense into variable and fixed elements. per unit Advertising expense Shipping expense Salaries and commissions expense 22% per unit 222 per unit 2-b. Using the high-low method, state the cost formula for each mixed expense. Y= A$ YA$ Y= A$ AS Advertising expense Shipping expense Salaries and commissions expense + X X X + A$ 4 3. Redo the company's income statement at the 5,480-unit level of activity using the contribution format. MORRISEY & BROWN LID. Contribution Margin Income Statement For the Quarter Ended September 30 Sales in units AS Less: Variable expenses A$ 0 0 Less. Fixed expenses 0 AS 0 1 4. Assume that the company's sales are projected to be 4.700 units in the next quarter. Prepare a contribution margin ir statement MORRISEY ARROW LTU Contribution Margin Projected Income Statement For the Quarter Ended March 31 Sales in units AS Less Variable expenses AS 0 0 Less Fixed expenses 0 AS 0