Problem 5A-9 (Algo) High-Low Method; Contribution Format Income Statement [LO5-10] Milden Company is a distributor who wants to start using a contribution format income statement for planning purposes. The company has analyzed its expenses and developed the following cost formulas: Cost Cost of good sold Advertising expense Sales commissions Shipping expense Administrative salaries Insurance expense Depreciation expense Cost Formula $32 per unit sold $188,000 per quarter 8% of sales ? $98,000 per quarter $10,800 per quarter $68,000 per quarter Because shipping expense is a mixed cost, the company needs to estimate the variable shipping expense per unit sold and the fixed shipping expense per quarter using the following data: Shipping Expense Quarter Year 1: First Units Sold 34,000 $ 178,000 Second 36,000 $ 193,000 Third Fourth 41,000 $ 235,000 37,000 $ 198,000 Year 2: First 35,000 $ 188,000 Second 38,000 $ 203,000 Third Fourth 52,000 49,000 $ 250,000 $ 226,000 Required: 1. Using the high-low method, estimate a cost formula for shipping expense in the form Y = a + bx. 2. In the first quarter of Year 3, the company plans to sell 39,000 units at a selling price of $65 per unit. Prepare a contribution format income statement for the quarter.