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Problem 6-4 Examining Cost Behaviour; High-Low Analysis; Contribution Margin Income Statement (LO1 - CC1, 3, 6; LO2 - CC9; LO3 - CC12) Mornsey &. Browm.
Problem 6-4 Examining Cost Behaviour; High-Low Analysis; Contribution Margin Income Statement (LO1 - CC1, 3, 6; LO2 - CC9; LO3 - CC12) Mornsey \&. Browm. Ld, of Sydney. Austrasia, is a mocehandising tirm that is the sole distributor of a product that is increasing in popularity among Australian consumers. The compdony's income statements for the three most recent months follow; (Noee, Morisey b Brewn the's Australan formatted income statement has been rocast into the format comanan in Canoda. Fhe Australandolot is denoted by AS.) Hequired: Arequed: 1. Vortily eech of the company's evponses (enclubling cost of goods sold as boing variable, fored, of mixed 2-a. Using the high-low method, separate each mixed expense into variable and fixed elements. 2-b. Using the high-low method, state the cost formula for each mixed expense. 3. Redo the company's income statement at the 7,400-unit level of activity using the contribution format. 4. Assume that the company's sales are projected to be 5,500 units in the next quarter. Prepare a contribution margin income statement
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