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I am Stuck on this question I have most of it done and have had it checked over and deleted the parts that are suppoused to be wrong. Can anyone help me with the remaining? 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 companys income statements for the three most recent months follow:

Morrisey & Brown, Ltd. Income Statements For the Three Months Ended September 30
		July				August			September
Sales in units		4,000				4,500			5,000
Sales		$400,000				$450,000			$500,000
Cost of goods sold		240,000				270,000			300,000
Gross margin		160,000				180,000			200,000
Selling and administrative expenses:
Advertising expense		21,000				21,000			21,000
Shipping expense		34,000				36,000			38,000
Salaries and commissions		78,000				84,000			90,000
Insurance expense		6,000				6,000			6,000
Depreciation expense		15,000				15,000			15,000
Total selling and administrative expenses		154,000				162,000			170,000
Net operating income		$ 6,000				$ 18,000			$ 30,000

Required:
1.	Identify each of the companys expenses (including cost of goods sold) as either variable, fixed, or mixed.
	Expenses Classification Cost of goods sold Variable Advertising expense Fixed Shipping expense Mixed Salaries and commissions Mixed Insurance expense Fixed Depreciation expense Fixed

2.	Using the high-low method, separate each mixed expense into variable and fixed elements. State the cost formula for each mixed expense.
	Variable Cost Fixed Cost Formula Cost of goods manufactured per unit Y = + per unit Salaries and commissions per unit Y = + per unit

3.	Redo the companys 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 Sales $500,000 Variable expenses: Cost of goods sold $300,000 Shipping expense 60,000 398,000 Contribution margin Fixed expenses: Insurance expense 6,000 Depreciation expense 15,000 Advertising expense 21,000 Salaries and commissions expense 92,500 Net operating income $30,000

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