Problem 2: Contribution Margin Income Statement Consider the information provided below for the Managerial Business Company. Activity Level 10,000 Units 12,000 Units 12,000 Units 15,000 Units Cost Behavior Cost Equation Sales $400,000 $480,000 $600,000 Cost of Goods Sold 150,000 180,000 225,000 Gross Profit $250,000 $300,000 $375,000 Operating Expenses Rent Expense $120,000 $120,000 $120,000 Utilities Expense 15,000 18,000 22,500 Supplies Expense 45,000 53,000 65,000 Total Expenses $180.000 $191,000 $207,500 Net Income $70,000 $109,000 $167,500 Required: 1. Identify each cost as variable, fixed, or mixed. 2. Separate mixed costs into their variable and fixed components and prepare a budgeted CONTIBUTION MARGIN Income Statement for an activity level of 13,500 units. 1