Homework Help is Here – Start Your Trial Now!
Business
Accounting
Morrisey & Brown, Limited, of Sydney is a merchandising company 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: Morrisey & Brown, Limited Income Statements For the Three Months Ended September 30 July August September Sales in units 7,500 8,000 8,500 $ 712,500 427,500 285,000 $ 760,000 $ 807,500 484,500 Sales Cost of goods sold Gross margin Selling and administrative expenses: Advertising expense Shipping expense 456,000 304,000 323,000 39,600 39,600 81,000 135,000 85,800 142,400 6,100 39,600 90,600 149,800 6,100 Salaries and commissions Insurance expense Depreciation expense Total selling and administrative expenses 6,100 19,300 281,000 $ 4,000 19,300 293,200 $ 10,800 19,300 305,400 $ 17,600 Net operating income Required: 1. By analyzing the data from the company's income statements, classify each of its expenses (including cost of goods sold) as either variable, fixed, or mixed. 2. Using the high-low method, separate each mixed expense into variable and fixed elements. Express the variable and fixed portions of each mixed expense in the form Y = a + bX. 3. Redo the company's income statement at the 8,500-unit level of activity using the contribution format.

Morrisey & Brown, Limited, of Sydney is a merchandising company 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: Morrisey & Brown, Limited Income Statements For the Three Months Ended September 30 July August September Sales in units 7,500 8,000 8,500 $ 712,500 427,500 285,000 $ 760,000 $ 807,500 484,500 Sales Cost of goods sold Gross margin Selling and administrative expenses: Advertising expense Shipping expense 456,000 304,000 323,000 39,600 39,600 81,000 135,000 85,800 142,400 6,100 39,600 90,600 149,800 6,100 Salaries and commissions Insurance expense Depreciation expense Total selling and administrative expenses 6,100 19,300 281,000 $ 4,000 19,300 293,200 $ 10,800 19,300 305,400 $ 17,600 Net operating income Required: 1. By analyzing the data from the company's income statements, classify each of its expenses (including cost of goods sold) as either variable, fixed, or mixed. 2. Using the high-low method, separate each mixed expense into variable and fixed elements. Express the variable and fixed portions of each mixed expense in the form Y = a + bX. 3. Redo the company's income statement at the 8,500-unit level of activity using the contribution format.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
icon
Concept explainers
Topic Video
Question

Please do the ones that have x's on them. 

Morrisey & Brown, Limited Income Statement For the Month Ended September 30 Sales $ 807,500 Variable expenses: Cost of goods sold $ 484,500 Shipping expense 90,600 Salaries and commissions expense 149,800 724,900 Contribution margin Fixed expenses: 82,600 Advertising expense 2$ 39,600 Shipping expense 9,000 Salaries and commissions expense 24,000 Insurance expense 6,100 Depreciation expense 19,300 98,000 Net operating income $ (15,400)
Transcribed Image Text:Morrisey & Brown, Limited Income Statement For the Month Ended September 30 Sales $ 807,500 Variable expenses: Cost of goods sold $ 484,500 Shipping expense 90,600 Salaries and commissions expense 149,800 724,900 Contribution margin Fixed expenses: 82,600 Advertising expense 2$ 39,600 Shipping expense 9,000 Salaries and commissions expense 24,000 Insurance expense 6,100 Depreciation expense 19,300 98,000 Net operating income $ (15,400)
Morrisey & Brown, Limited, of Sydney is a merchandising company 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: Morrisey & Brown, Limited Income Statements For the Three Months Ended September 30 July August September Sales in units 7,500 8,000 8,500 $ 712,500 427,500 285,000 $ 760,000 456,000 304,000 $ 807,500 484,500 323,000 Sales Cost of goods sold Gross margin Selling and administrative expenses: Advertising expense Shipping expense Salaries and commissions Insurance expense 39,600 39,600 85,800 142,400 39,600 90,600 81,000 135,000 6,100 19,300 281,000 149,800 6,100 Depreciation expense Total selling and administrative expenses 6,100 19,300 293,200 19,300 305,400 Net operating income $ 4,000 $ 10,800 $ 17,600 Required: 1. By analyzing the data from the company's income statements, classify each of its expenses (including cost of goods sold) as either variable, fixed, or mixed. 2. Using the high-low method, separate each mixed expense into variable and fixed elements. Express the variable and fixed portions of each mixed expense in the form Y = a + bX. 3. Redo the company's income statement at the 8,500-unit level of activity using the contribution format.
Transcribed Image Text:Morrisey & Brown, Limited, of Sydney is a merchandising company 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: Morrisey & Brown, Limited Income Statements For the Three Months Ended September 30 July August September Sales in units 7,500 8,000 8,500 $ 712,500 427,500 285,000 $ 760,000 456,000 304,000 $ 807,500 484,500 323,000 Sales Cost of goods sold Gross margin Selling and administrative expenses: Advertising expense Shipping expense Salaries and commissions Insurance expense 39,600 39,600 85,800 142,400 39,600 90,600 81,000 135,000 6,100 19,300 281,000 149,800 6,100 Depreciation expense Total selling and administrative expenses 6,100 19,300 293,200 19,300 305,400 Net operating income $ 4,000 $ 10,800 $ 17,600 Required: 1. By analyzing the data from the company's income statements, classify each of its expenses (including cost of goods sold) as either variable, fixed, or mixed. 2. Using the high-low method, separate each mixed expense into variable and fixed elements. Express the variable and fixed portions of each mixed expense in the form Y = a + bX. 3. Redo the company's income statement at the 8,500-unit level of activity using the contribution format.
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 4 steps with 2 images

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Costing Systems
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS