Question 4 Alden Company has decided to use a contribution format income statement for internal planning purposes. The company has analyzed its expenses and has developed the following cost formulas: Cout Cost of goods sold Advertising expense Sales Coins Administrative salaries Shipping expense Depreciation expense Cost Formula $20 per unit old $170.000 per quarter 5% of sales $80,000 per quan 550.000 per Quarter First 18.000 Third Fourth First Second Management has concluded that shipping expense is a mixed cost, containing both variable and fixed cost elements. Units sold and the related shipping expense over the last eight quarters are given below: Quarter Units Sold Shipping Expense Year 1: 16,000 $180.000 Second $175.000 23,000 $217,000 19.000 $180,000 Year 2 17.000 $170,000 20,000 $185,000 Third 25,000 $232,000 22.000 $208,000 Management would like a cost formula derived for shipping expense so that a budgeted contribution format income statement can be prepared for the next quarter. Required: 1. Using the high-low method, estimate a cost formula for shipping expense. 2. In the first quarter of Year 3, the company plans to sell 21,000 units at a selling price of $50 per unit. Prepare a contribution format income statement for the quarter. 2 Fourth