Please use this data to answer all yellow highlighted areas 
E FA 1Jay Corporation has decided to prepare contribution income statements for internal planning 2 3 Budgeted information for Quarter 1 of Year 3: 17,000 4 Sales in units 5 Sales price per unit S 48.00 6 7 After analyzing expenses, the company has determined the following cost patterns. Variable Cost of Goods Sold (per unit) Sales Commissions (per dollar of sales) 8 29.00 9 9.50% 10 Fixed Manufacturing Overhead (per quarter) Administrative Salaries (per quarter) 11 S 45,000.00 12 27,000.00 13 Depreciation Expense (per quarter) S 36,000.00 14 15 Shipping Cost has been determined to be mixed with the following costs for the past two years: 16 Total Cost 17 Year 1 Units 12,500 18 Quarter 1 Quarter2 Quarter 3 S 67,000.00 19 $ 94,000.00 21,000 13,800 20,000 20 89,800.00 Quarter 4 22 Year 2 21 92,600.00 23 Quarter 1 S 72,500.00 13,700 24 Quarter2 $ 80,000.00 14,000 Sheet1 READY 100% Attempt(s) Hint 28 Use the data to answer the following. 29 30 1. Using the high-low method, determine a cost formula for shipping expenses 31 32 Total Shipping Cost Units 33 High level of activity 34 Low level of activity 35 Change in activity 36 37 Variable shipping cost per unit per unit 38 39 Fixed shipping cost: (Note: please use the highest activity point to compute the total fixed cost.) Total shipping cost at high level of activity Less: Variable shipping cost at high level of activity 42 Total fixed shipping cost 40 41 43 44 2. Prepare a contribution margin income statement for Quarter 1 of Year 3. 45 4C 46 Jay Corporation Budgeted Income Statement For Year 3, Quarter 1 47 48 49 50 Sales 51 Variable expenses: 52 Cost of goods sold 53 Sales commissions 54 Shipping expense (Variable portion) 55 Total variable expenses 56 Contribution margin 57 Fixed expenses: 58 Fixed Manufacturing Overhead 59 Administrative Salaries Shipping expense (Fixed portion) Depreciation expense 62 Total fixed expenses 60 61 63 Net operating income 64 65 Sheet1 E FA 1Jay Corporation has decided to prepare contribution income statements for internal planning 2 3 Budgeted information for Quarter 1 of Year 3: 17,000 4 Sales in units 5 Sales price per unit S 48.00 6 7 After analyzing expenses, the company has determined the following cost patterns. Variable Cost of Goods Sold (per unit) Sales Commissions (per dollar of sales) 8 29.00 9 9.50% 10 Fixed Manufacturing Overhead (per quarter) Administrative Salaries (per quarter) 11 S 45,000.00 12 27,000.00 13 Depreciation Expense (per quarter) S 36,000.00 14 15 Shipping Cost has been determined to be mixed with the following costs for the past two years: 16 Total Cost 17 Year 1 Units 12,500 18 Quarter 1 Quarter2 Quarter 3 S 67,000.00 19 $ 94,000.00 21,000 13,800 20,000 20 89,800.00 Quarter 4 22 Year 2 21 92,600.00 23 Quarter 1 S 72,500.00 13,700 24 Quarter2 $ 80,000.00 14,000 Sheet1 READY 100% Attempt(s) Hint 28 Use the data to answer the following. 29 30 1. Using the high-low method, determine a cost formula for shipping expenses 31 32 Total Shipping Cost Units 33 High level of activity 34 Low level of activity 35 Change in activity 36 37 Variable shipping cost per unit per unit 38 39 Fixed shipping cost: (Note: please use the highest activity point to compute the total fixed cost.) Total shipping cost at high level of activity Less: Variable shipping cost at high level of activity 42 Total fixed shipping cost 40 41 43 44 2. Prepare a contribution margin income statement for Quarter 1 of Year 3. 45 4C 46 Jay Corporation Budgeted Income Statement For Year 3, Quarter 1 47 48 49 50 Sales 51 Variable expenses: 52 Cost of goods sold 53 Sales commissions 54 Shipping expense (Variable portion) 55 Total variable expenses 56 Contribution margin 57 Fixed expenses: 58 Fixed Manufacturing Overhead 59 Administrative Salaries Shipping expense (Fixed portion) Depreciation expense 62 Total fixed expenses 60 61 63 Net operating income 64 65 Sheet1
