Time remaining: 1:14 1. value: 10.00 points Arnall Ltd., a British merchandising company, is the exclusive distributor of a product that is gaining rapid market acceptance. The company's revenues and expenses (in British pounds) for the last three months are given below: Arnall Ltd. Comparative Income Statements For the Three Months Ended June 30 April May 4,100 1,100 June 5,900 Sales in units Sales revenue Cost of goods sold 220,000 101,200 820,000 377,200 1,180,000 542,800 Gross margin 118,800 442,800 637,200 Selling and administrative expenses: Shipping expense Advertising expense Salaries and commissions Insurance expense Depreciation expense 30,600 56,000 80,700 6,800 38,000 78,600 56,000 221,700 6,800 38,000 107,400 56,000 306,300 6,800 38,000 Total selling and administrative expenses 212,100 401,100 514,500 Net operating income (loss) (93,300) 41,700 122,700 (Note: Arnall Ltd.'s income statement has been recast in the functional format common in the United States. The British currency is the pound, denoted by .) Required: 1. Identify each of the company's expenses (including cost of goods sold) as either variable, fixed, or mixed. Classification Expenses Cost of goods sold Shipping expense Advertising expense Salaries and commissions Insurance expense Depreciation expense 2. Using the high-low method, separate each mixed expense into variable and fixed elements. State the cost formula for each mixed expense. (Enter mixed expenses in the order of company expenses provided under question.) Variable Cost Fixed Cost Formula Y = per unit per unit Y = 3. Redo the company's income statement at the 5,900-unit level of activity using the contribution format. Arnall Ltd. Income Statement For the Month Ended June 30 Variable expenses: Total variable expenses Fixed expenses: Total fixed expenses