1. What is the difference between fixed costs, variable costs, and mixed costs? Give two examples of each type. 2. 3. What is a sunk cost? Can sunk costs be only fixed, only variable, or both? Explain. What is a differential cost? Can differential costs be only fixed, only variable or both? Explain. PROBLEM 1-Traditional & Contribution Margin Format Income Statements: XYZ Corporation, is a merchandising company located in Austin, Texas. The following information is available for March of 2022: I Number of units sold Selling price per unit Unit cost of goods sold 7,000 $650 $425 Variable selling expense per unit $55 Total fixed selling expense $126,000 Variable administrative expense per unit $25 Total fixed administrative expense $200,000 Cost of goods sold is a variable cost in this company since they are a merchandising firm. Required: a. b. C. Prepare a traditional format income statement for March. Remember your statement headings. Prepare a contribution format income statement for March. Remember your statement headings. Which format do you prefer? Why?