Problem 2A-7 (Algo) Cost Behavior; High-Low Method; Contribution Format Income Statement [LO2-10] Morrisey & Brown, Limited, 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: July August September Sales in units 8,750 9,250 9,750 _ e == == Sales $ 962,500 $ 1,017,500 $ 1,072,500 Cost of goods sold 577,500 618,500 643,500 Gross margin 385,000 407,000 429,000 Selling and administrative expenses: Advertising expense 31,000 31,000 31,000 Shipping expense 120,000 125,800 131,600 Salaries and commissions 160, 000 167,900 175,800 Insurance expense 6,950 6,950 6,950 Depreciation expense 16,708 16,7e@ 16,700 Total selling and administrative expenses 334,650 348,350 362,850 Net operating income $ 50,350 $ 58,650 $ 66,950 Required: 1. Using the high-low method, separate each mixed expense into variable and fixed elements. Express the variable and fixed portions of each mixed expense in the form Y =a + bX. 2. Redo the company's income statement at the 9,750-unit level of activity using the contribution format. Using the high-low method, separate each mixed expense into variable and fixed elements. Express the variable and fixed portions of each mixed expense in the form = a + bX. Note: Round the Variable cost per unit to 2 decimal places. Redo the company's income statement at the 9,750-unit level of activity using the contribution format. mewpeeses