Problem 5A-7 Cost Behavior; High-Low Method; Contribution Format Income Statement [LO5-10] 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 September 10,000 $1,050,000 630,000 420,000 August 9,500 Sales in units Sales Cost of goods sold Gross margin Selling and administrative expenses: 9,000 945,000 567,000 378,000 997,500 598,500 399,000 Advertising expense Shipping expense Salaries and commissions Insurance expense Depreciation expense 30,800 130,000 165,000 10,950 17,300 354,050 $ 23,950 30,800 136,000 173,000 10,950 17,300 368,050 30,950 30,800 142,000 181,000 10,950 17,300 382,050 Total selling and administrative expenses Net operating income $37,950 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 10,000-unit level of activity using the contribution format