value: 10.00 points Milden Company has an exclusive franchise to purchase a product from the manufacturer and distribute it on the retail level. As an aid in planning, the company has decided to start using a contribution format income statement. To have data to prepare such a statement, the company has analyzed its expenses and has developed the following cost formulas: Cost Cost of good sold Advertising expense Sales commissions Shipping expense Administrative salaries Insurance expense Depreciation expense Cost Formula $28 per unit sold $178,000 per quarter 6% of sales 2 $88,000 per quarter $9,800 per quarter $58,000 per quarter 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 follow Shipping Expense Units Sold Quarter Year 1: First Second Third Fourth Year 2 First Second Third Fourth 24,000 26.000 31,000 27,000 $168.000 $183.000 $225.000 $188.000 25,000 28,000 38,400 35,400 $178,000 $ 193.000 $240.000 $216.000 Milden Company's president 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 based on the data for the last eight quarters above. Shipping Expense Units Sold High activity level Low activity level Change PENERANGAN 1 per unit Variable cost per unit Fixed cost element Fixed 2. In the first quarter of Year 3, the company plans to sell 31,000 units at a selling price of $58 per unit. Prepare a contribution format income statement for the quarter. (Do not round your intermediate calculations.) Milden Company Budgeted Contribution Format Income Statement For the First Quarter, Year 3 Variable expenses: TE Total variable expenses EN Fixed expenses Total fixed expenses