Sims High-Low Method; Contribution Format Income Statement 1. Analyze a mixed cost using a scattergraph plot and the high-low method. 2. Prepare income statements for a merchandising company using the traditional and contribution formats. Sign In 3 High-Low Method: Contribution Format Income Stateme... FILE HOME INSERT PAGE FORMULAS DATA REVIEW VIEW X Calibri BTU E- SA - AlignmehumbeonditioFormat Cell Cells Formattias Styles Clipboard Font Styles D3 Paste A D 8 9 F 1 To aid in planning, Jay Corporation is preparing a contribution format income statement. 2 3 Budgeted information for Quarter of Year 3: 4 Sales in units 17.000 $ Sales price per unit $ 48.00 6 7 Aher analyzing expenses, the company has determined the following cost patterns. Cost of goods sold $ 29.00 per unit Sales commissions 9.50% per dollar of sales 10 11 Administrative salaries 5 45.000.00 per quarter 12 Rent expense $ 27000.00 per quarter 13 Depreciation expense $ 36000.00 per quarter 14 us Management has concluded that shipping expense is a mixed cost. Units shipped and the related shipping cost over the last eight quarters are 16 17 Your 1 Total Shipping Cost Units 18 Quarter 1 $ 67 000.00 12.500 19 Quarter2 $ 94.000.00 21.000 20 Quarter 3 $ 89.800.00 13.800 21 Quarter 4 $ 92.800.00 20.000 22 Year 2 Sheet1 READY Attempt(s) +100% Hint - 5 X Sign In FILE High-Low Method: Contribution Format Income Stateme... HOME INSERT PAGE FORMULAS DATA REVIEW VIEW Calibri 11 AA 96 Paste BIU- 2.). A AlignmeNumbefonditio Format Cell Cells Formattiras Styles Clipboard Font Styles D3 D E F B 22 Year 2 23 Quarter 1 72,500.00 13,700 24 Quarter2 80,000.00 14.000 25 Quarter 3 $ 84.000.00 14,300 26 Quarter 4 100.000.00 22,500 27 28 Use the data to answer the following. 29 30 1. Using the high-low method, determine a cost formula for shipping expenses. 31 32 Total Shipping Cost Units 33 High level of activity 34 Low level of activity 35 Change in activity 36 37 Variable cost 38 39 Compute the fixed cost portion using the high level of activity. 40 Total cost at high level of activity 41 Less: Variable cost element 42 Total fixed cost per unit 44 2. Prepare a contribution format income statement for Quarter 1 of Year 3. Sheet1 E READY Attempt(s) +100% Hint 1. Analyze a mixed cost using a scattergraph plot and the high-low method. 2. Prepare income statements for a merchandising company using the traditional and contribution 5 X Sign In 3. High-Low Method: Contribution Format Income Stateme... FILE HOME INSERT PAGE FORMULAS DATA REVIEW VIEW X % Calibri - 11 AA BTU A AlignmeNumbefonditioFormat Cell Cells Formattir as Styles Clipboard Font Styles Paste 3 D3 D E F B 44 2. Prepare a contribution format income statement for Quarter of Year 3. 45 46 Jay Corporation 47 Budgeted Contribution Format Income Statement 48 For Year 3. Quarter 1 49 so Sales 51 Variable expenses 52 Cost of goods sold 53 Sales commissions 34 Shipping expense 55 Total variable expenses 56 Contribution margin 57 Fixed expenses 58 Administrative salaries 39 Rent expense 60 Shipping expense Depreciation expense Total fixed expenses 63 Net operating income 61 9 8 & Sheet1 READY Attempts) 400%