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estion 2 Part 1B points Milden Company is a distributor who wants to start using a contribution format income statement for planning purposes. The
estion 2 Part 1B points Milden Company is a distributor who wants to start using a contribution format income statement for planning purposes. The company has analysed its expenses and developed the following cost formula: Cost Cost of goods sold Advertising expense Sales commissions Shipping expense Administrative salaries Insurance expense Cost Formula $35 per unit sold $210, 000 per quarter 6% of sales ? $145, 000 per quarter $9, 000 per quarter Depreciation expense $76, 000 per quarter Because shipping expense is a mixed cost, the company needs to estimate the variable shipping expense per unit sold and the fixed shipping expense per quarter using the following data: Quarter Shot on OnePlus By PranayGoud Year 1: Units Sold Shipping Expense 8.35 AM Depreciation expense $9,000 per quarter $76, 000 per quarter Because shipping expense is a mixed cost, the company needs to estimate the variable shipping expense per unit sold and the fixed shipping expense per following data: arter using the Tupe here to searchi Shot on OnePlus By PranayGoud Quarter Units Sold Shipping Expense Year 1: First 10,000 $119,000 Second 16,000 $175,000 18,000 $190,000 Third 15,000 $164,000 Fourth Year 2: First 11,000 $130,000 17,000 $185,000 Second 30.000 Required First 11,000 $130,000 Second 17,000 $185,000 Third 20,000 $210,000 Fourth 13,000 $147,000 1. Using the high-low method, estimate a cost formula for shipping expense in the form Y= a+ Bx (2 marks) 2. In the first quarter of Year 3, the company plans to sell 12,000 units at a selling price of $100 per unit. Prepare a contribution format income statement for the quarter s marks) Please provide responses to both questions in the answer box below. Clearly mark the question part you are addressing (e.g 1. or 2.1 in your answer TTT Arial 3 3 (12pt) T E-E Shot on OnePlus PranayGoud E4AM
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To address the question lets break it down into two parts Part 1 Estimate a Cost Formula for Shipping Expense Using the HighLow Method The highlow met...Get Instant Access to Expert-Tailored Solutions
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