QUESTION 3 1. Pelotoni Dips Inc. manufactures a single product that has become very popular in the Windsor area. The income statement for the most recent three months prior to taxes are as follows: Pelotini Dips Inc. Income Statement Quarterly Statement ending March 31, 2021 Q2 Q3 Q4 Sales in Units 4.400 4,000 5,000 4.600 Sales Revenues $440,000 $400.000 $500.000 $460.000 Less:COGS $264,000 $240,000 $300.000 $276,000 Gross Margin $176,000 $160,000 $200,000 $184,000 Less: Expenses Advertising $ 21,000 $ 21,000 $ 21 000 $ 21,000 Shipping $ 35,000 $ 34.000 $ 38,000 $ 36,000 Salaries and Commissions $ 85,000 $ 78.000 $ 90,000 $ 85.000 Insurance $ 6,000 $ 6.000 $ 6.000 $ 6,000 Depreciation $ 15,000 $ 15,000 $ 15,000 $ 15.000 Total Operating Expenses $160.000 $154,000 $170.000 $165,000 Net Income (before taxes) $ 16,000 $ 6,000 $ 30,000 $ 21,000 1. Using the high-low method, separate each mixed expense into variable and fixed expenses. Provide the cost formula for each mixed expense. [Hint: identify your expenses to find out the mixed expenses.] [10 marks] 2. Now redo the company's income statement at the 5,000-unit level of activity using the contribution format. (8 marks) 3. Your marketing manager sat down with the budgeting team and predicts sales to be at the 4,500 units in the next quarter. Prepare a contribution margin income statement. (8 marks)