Using the high-low method, separate each mixed expense into variable and

fixed elements. Using the Y = a + bX format, state the cost formula for each

mixed expense.

Pioneer Company, a merchandising company, is the exclusive distributor of a product that is gaining rapid market acceptance. The company's revenues and expenses for the last three months are given below Pioneer Company Comparative Income Statements For the Three Months Ended June 30 April 3,000 May 3,750 June Sales in units 4,500 5420,000 S525,000 S630,000 168,000) (210,000) (252,000) 252,000 Sales revenue Cost of goods sold Gross profit Selling and administrative expenses: Shipping expense Advertising expense Salaries and commissions Insurance expense Depreciation expense Total selling and administrative expenses (272,000)(296,000) (320,000) Net operating income (l 315,000 378,000 44,000 70,000 107,000 9,000 42,000 50,000 70,000 125,000 143,000 9,000 42,00042,000 56,000 70,000 9,000 5120 519,000 S58,000