Problem 5A-7 Cost Behavior; High-Low Method; Contribution Format Income Statement (LO5-10] 0.83 points 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: eBook August 4,500 $ 450,000 270,000 180,000 September 5,000 $ 500,000 300,000 200,000 Print Morrisey & Brown, Ltd. Income Statements For the Three Months Ended September 30 July Sales in units 4,000 Sales $ 400,000 Cost of goods sold 240,000 Gross margin 160,000 Selling and administrative expenses: Advertising expense 21,000 Shipping expense 34,000 Salaries and commissions 78,000 Insurance expense 6,000 Depreciation expense 15,000 Total selling and administrative expenses 154,000 Net operating income $ 6,000 References 21,000 36,000 84,000 6,009 15,000 162,000 $ 18,000 21,000 38,000 90,000 6,000 15,000 170,000 $ 30,000 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 5,000-unit level of activity using the contribution format. points Complete this question by entering your answers in the tabs below. eBook Required 1 Required 2 Required 3 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. Print Expenses Classification Cost of goods sold References Advertising expense Shipping expense Salaries and commissions Insurance expense Depreciation expense 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. Fixed Cost Formula Variable Cost per unit per unit Y = (per unit A a X Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Redo the company's income statement at the 5,000-unit level of activity using the contribution format. Morrisey & Brown, Ltd. Income Statement For the Month Ended September 30 Variable expenses: Fixed expenses