1. Using high low method, separate each mixed expenses into variable and fixed elements. 2. high low method, state cost formula for each mixed expenses. 3. company Income statement Morrisey &Brown, Ltd, of Sydney, Australia, is a merchandising firm 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 HORRISEY&BROMN, LTD. Income Statements For the Four Quarters Ending Decenber 31 Quarter 1 Quarter 2 Quarter 3 Quarter 4 4,800 Sales in units 4,700 4,200 5,240 Sales revenue Less: Cost of goods sold Gross margin Less: Operating expenses: Advertising expense Shipping expense Salaries and commissions Insurance expense A$470, 000 AS420,000 AS524,000 A$480,000 282,000 188,000 288,000 192,000 252,000 314,400 209,600 168,000 21,200 34,800 79,200 6, 200 15, 200 156,600 21,200 36,800 78,400 6,200 15,200 157,800 21, 280 40,960 90,880 6,200 15,200 21,200 36,760 86,160 6,200 15,200 165,520 Depreciation expense Total operating expenses 174,440 Net income AS 31,400 AS 10,200 AS 35,160 AS 26,480 (Note. Morrisey& Brown, Ltd's Australian-formatted income statement has been recast into the format common in Canada. The Australian dollar is denoted by AS)
1. Using high low method, separate each mixed expenses into variable and fixed elements. 2. high low method, state cost formula for each mixed expenses. 3. company Income statement Morrisey &Brown, Ltd, of Sydney, Australia, is a merchandising firm 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 HORRISEY&BROMN, LTD. Income Statements For the Four Quarters Ending Decenber 31 Quarter 1 Quarter 2 Quarter 3 Quarter 4 4,800 Sales in units 4,700 4,200 5,240 Sales revenue Less: Cost of goods sold Gross margin Less: Operating expenses: Advertising expense Shipping expense Salaries and commissions Insurance expense A$470, 000 AS420,000 AS524,000 A$480,000 282,000 188,000 288,000 192,000 252,000 314,400 209,600 168,000 21,200 34,800 79,200 6, 200 15, 200 156,600 21,200 36,800 78,400 6,200 15,200 157,800 21, 280 40,960 90,880 6,200 15,200 21,200 36,760 86,160 6,200 15,200 165,520 Depreciation expense Total operating expenses 174,440 Net income AS 31,400 AS 10,200 AS 35,160 AS 26,480 (Note. Morrisey& Brown, Ltd's Australian-formatted income statement has been recast into the format common in Canada. The Australian dollar is denoted by AS)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:1. Using high low method, separate each mixed expenses into
variable and fixed elements.
2. high low method, state cost formula for each mixed
expenses.
3. company Income statement
Morrisey&Brown, Ltd, of Sydney, Australia, is a merchandising firm 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
HORRISEY&BROMN, LTD.
Income Statements
For the Four Quarters Ending Decenber 31
Quarter 1 Quarter 2 Quarter 3 Quarter 4
Sales in units
4,700
4,200
5,240
4,800
Sales revenue
Less: Cost of goods sold
Gross margin
Less: Operating expenses:
Advertising expense
Shipping expense
Salaries and commissions
Insurance expense
Depreciation expense
Total operating expenses
A$470,000 A$420,800 A$524,000 A$480,000
314,400
209,680
282,000
188,000
252,000
288,000
192,000
168,000
21,200
34,800
79,200
6,200
15,200
156,600
21,280
36, 800
78,400
6,200
15,200
157,800
21, 200
40,960
90,880
6,200
15,200
174,440
21,200
36,760
86,160
6,200
15, 200
165,520
es
Net income
AS 31,480 AS 10,200 AS 35,169 AS 26,480
(Note: Morrisey & Brown, Ltd's Australian-formatted income statement has been recast into the format common in Canada. The
Australian dollar is denoted by AS.)
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