Skate World is a merchandising company that sells skateboards both at its retail s tore and its online store. Results for the most recent three months are shown below.

Required

1. Identify each of the company's expenses (including cost of goods sold) as either variable, fixed, or mixed.

2. Using the high-low method, separate each mixed expense into variable and fixed elements. State the cost formula for each mixed expense.

3. Redo the company's income statement for September using the contribution format.

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September July August Sales in units 4,000 4,500 5,000 $500,000 300,000 200,000 Sales... $400,000 $450,000 Cost of goods sold Gross margin ... Selling and administrative Advertising expense. Shipping expense. Salaries and commissions 270,000 180,000 240,000 160,000 expenses 21,000 36,000 21,000 21,000 34,000 38,000 90,000 78,000 6,000 84,000 Insurance expense 6,000 6,000 Depreciation expense. Total selling and administrative. Operating income.. 15,000 162,000 $ 18,000 15,000 154,000 $ 6,000 15,000 170,000 $ 30,000