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: 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. Note that there may be one or more "blank" rows under a particular heading. For example, there are four rows under the "Variable expenses:" heading. The correct solution may not require that you use all four rows (i.e., if there are only three expenses that should be under this heading, then you would leave the fourth row blank). The last row under each heading will show the total for that section of the statement. 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 : portions of each mixed expense in the form Y = a + bx. Variable Cost Formula per unit Fixed Cost Y = [ Ty= + L + per unit four rows (i.e., if there are only three expenses that should be under this heading, then you would leave the fourth row blank). The last row under each heading will show the total for that section of the statement. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 By analyzing the data from the company's income statements, classify each of its expenses (including cost of goo either variable, fixed, or mixed. Classification Expenses Cost of goods sold Advertising expense Shipping expense Salaries and commissions Insurance expense Depreciation expense 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: August 4,500 $ 450,000 270,000 180,000 September 5,000 $ 500,000 300,000 200,000 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 21,000 37,000 86,000 6,000 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. Note that there may be one or more "blank" rows under a particular heading. For example, there are four rows under the "Variable expenses:" heading. The correct solution may not require that you use all four rows (i.e., if there are only three expenses that should be under this heading, then you would leave the fourth row blank). The last row under each heading will show the total for that section of the statement. Complete this question by entering your answers in the tabs below
