Problem 6A-7 (Algo) Cost Behavior; High-Low Method; Contribution Format Income Statement [LO6-10] Morrisey & Brown, Limited, 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, Limited Income Statements For the Three Months Ended September 30 Sales Sales in units. Cost of goods sold. Gross margin July 4,750 $546,250 August 5,250 September 5,750 - $ 603,750 327,750 210,500 362,250 241,500 5 661,250 396,750 264,500 Selling and administrative expenses Advertising expense 31,800 31,800 31,800 Shipping expense 35,500 38,100 40,700) Salaries and commissions 81,000 87,300 93,600 6,550 6,550 6,550 Total selling and administrative expenses 18,000 172,850 18,000 181,750 18,000 190,650 $ 45,650 $ 59,750 $ 73,850 Insurance expense Depreciation expense Net operating income 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 5,750-unit level of activity using the contribution format.