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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:

Morrisey & Brown, Ltd. Income Statements For the Three Months Ended September 30
	July		August		September
Sales in units	1,900		3,300		4,950
Sales revenue	A$ 342,000		A$ 594,000		A$ 891,000
Cost of goods sold	127,300		221,100		331,650
Gross margin	214,700		372,900		559,350
Selling and administrative expenses:
Advertising expense	69,900		69,900		69,900
Shipping expense	42,500		59,300		79,100
Salaries and commissions	110,400		166,400		232,400
Insurance expense	9,700		9,700		9,700
Depreciation expense	41,900		41,900		41,900
Total selling and administrative expenses	274,400		347,200		433,000
Net operating income (loss)	A$ (59,700	)	A$ 25,700		A$ 126,350

(Note: Morrisey & Brown, Ltd.'s Australian-formatted income statement has been recast in the format common in the United States. The Australian dollar is denoted here by A$.) Using the high-low method, separate each mixed expense into variable and fixed elements. (Omit the "A$" sign in your response.) (Click to select) Insurance expense Depreciation expense Cost of goods sold Shipping expense Advertising expense (Click to select) Advertising expense Insurance expense Salaries and commissions Depreciation expense Cost of goods sold Variable cost A$ per unit A$ per unit Fixed cost A$ A$ (b) State the cost formula for each mixed expense. (X represents sales in units). (Omit the "A$" sign in your response.) (Click to select) Depreciation expense Advertising expense Cost of goods sold Insurance expense Shipping expense Y = A$ + A$ X (Click to select) Advertising expense Insurance expense Cost of goods sold Salaries and commissions Depreciation expense Y = A$ + A$ X Requirement 3: Redo the company's income statement at the 4,950-unit level of activity using the contribution format.(Input all amounts as positive values except net operating loss which should be indicated by a minus sign. Omit the "A$" sign in your response.) Morrisey & Brown, Ltd. Income Statement For the Month Ended September 30 (Click to select) Work in process Finished goods Sales Cost of goods manufactured Cost of goods sold Accounts receivable Manufacturing overhead A$ Variable expenses: (Click to select) Sales Shipping expense Depreciation expense Cost of goods sold Salaries and commissions expense Insurance expense Advertising expense A$ (Click to select) Shipping expense Sales Cost of goods sold Advertising expense Salaries and commissions expense Insurance expense Depreciation expense (Click to select) Salaries and commissions expense Depreciation expense Cost of goods sold Sales Insurance expense Advertising expense Shipping expense Contribution margin Fixed expenses: (Click to select) Sales Depreciation expense Insurance expense Salaries and commissions expense Shipping expense Advertising expense Cost of goods sold (Click to select) Depreciation expense Cost of goods sold Advertising expense Shipping expense Insurance expense Salaries and commissions expense Sales (Click to select) Advertising expense Salaries and commissions expense Shipping expense Insurance expense Depreciation expense Cost of goods sold Sales (Click to select) Advertising expense Insurance expense Sales Shipping expense Depreciation expense Salaries and commissions expense Cost of goods sold (Click to select) Advertising expense Sales Shipping expense Salaries and commissions expense Insurance expense Cost of goods sold Depreciation expense (Click to select) Net operating loss Net operating income A$

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