Using the high low method, estimate the cost formula for billing expense. Round off both the fixed cost and the variable cost per thousand units sold to the nearest whole dollar

200116 Management Accounting Fundamentals Professional Task - Part 1: Group Work Each question is worth 15 marks. Question 1: Contribution format income statement and High-Low Method The accounting department of Archer Company, a merchandising company, has prepared the following analysis: Cost Cost Formula Cost of goods sold $ 56 per unit Sales commissions 12% of sales Advertising expense $ 300,000 per month Administrative salaries $ 160,000 per month Billing expense ? Depreciation expense $ 62,000 per month The accounting department feels that billing expense is a mixed cost, containing both fixed and variable cost elements. The billing expenses and sales in units over the last several months follow: Units Sold Billing Expense (thousands) January 9 $ 30,000 February 11 $ 33,000 March 14 $ 36,000 April 17 $ 42,000 May 15 $ 39,000 June 12 $ 35,000 The accounting department now plans to develop a cost formula for billing expense so that a contribution format income statement can be prepared for management's use