Operational information Part 2 The owners of Dynamadics were reviewing the financial information for one of its product lines produced and sold from its Penticton region. The revenues and expenses for the last four months for this product line in the Penticton Region is presented below. Dynamadics - Penticton Region Comparative Monthly Income Statements March April May June Sales in units 5,900 5,400 6,150 6,800 Sales Revenue $755,200 $691,200 $787,200 $870,400 Less: Cost of Goods sold 386,400 359,400 394,900 435,000 Gross Margin 368,800 331,800 392,300 435,400 Less: Operating Expenses Shipping 68,800 64,300 71,800 75,500 Advertising 79,000 79,000 79,000 79,000 Salaries/Commissions 174,100 157,300 174,800 189,500 Insurance 9,900 9,900 9,900 9,900 Depreciation 48,000 48,000 48,000 48,000 Total operating expenses 379,800 358,500 383,500 401,900 Net income $(11,000) $26,700 $8,800 $33,500 Requirement #2 (19 marks) The owners are concerned about the profit levels for the Penticton region. They would like to understand more about the cost behaviours and have asked you to prepare some analysis based on the information presented in Operational Information Part 2. Specifically, they would like to know the following: 1. Of the costs incurred, which are variable, fixed or a combination of variable and fixed (mixed)? (1.5 marks) 2. What is the cost equation for each of the mixed costs? (tip: use the high-low method) (7.5 marks) 3. Sales demand in the August is expected to be 6,300 units. Prepare a contribution margin income statement (in good form) for the month of August. (10 marks