2. Shellac Ltd. manufactures a single product. It has a September 30 year end, and is updating its planning information for 2022, as sales volume in 2021 was higher than expected. The income statements for the two most recent years is presented below: Shellac Ltd Income Statement For the year ended September 2020 2021 Units sold 5,000 6.200 Sales revenue 625,000 775,000 Cost of goods sold 290,000 339.200 Gross margin 335,000 435,800 Operating expenses Office and administration 51,000 54,600 Salaries and benefits 160,000 160,000 Sales commissions 31,250 38,750 60,000 60,000 Total 302,250 313,350 Operating income 32,750 122,450 Rent 4 4 Required: a) Indicate whether each of the 5 expenses on the income statement are fixed, variable, or mixed costs. b) For each mixed cost, calculate the fixed and variable component Using the high-low method. c) Prepare an income statement for 2022 using the cost information you have just determined. Use a sales volume of your choice, as long as it is not 5,000, 6,200 or 7,400 units. What assumption about the relevant range is implied in this process? 10