Problem 2A-7 (Algo) Cost Behavior; High-Low Method; Contribution Format Income Statement [LO2-10] 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: Sales in units Sales Cost of goods sold Gross margin Selling and administrative expenses: Advertising expense Shipping expense Salaries and commissions Insurance expense Morrisey & Brown, Limited Income Statements For the Three Months Ended September 30 July 8,750 $ 962,500 577,500 385,000 Depreciation expense Total selling and administrative expenses Net operating income Required: 31,000 120,000 160,000 6,950 16,700 334,650 $ 50,350 August Variable Cost per unit per unit 9,250 $ 1,017,500 610,500 407,000 31,000 125,800 167,900 6,950 16,700 348,350 $ 58,650 Fixed Cost September 9,750 $ 1,072,500 643,500 429,000 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. Note: Round the Variable cost per unit to 2 decimal places. Y= Y= 31,000 131,600 175,800 6,950 16,700 362,050 $ 66,950 Formula X X

FINANCIAL ACCOUNTING

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ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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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:

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.

Problem 2A-7 (Algo) Cost Behavior; High-Low Method; Contribution Format Income Statement [LO2-10]
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:
Sales in units
Sales
Cost of goods sold
Morrisey & Brown, Limited
Income Statements
For the Three Months Ended September 30
July
8,750
$ 962,500
577,500
385,000
Gross margin
Selling and administrative expenses:
Advertising expense
Shipping expense
Salaries and commissions
Insurance expense
Depreciation expense
Total selling and administrative expenses
Net operating income
Required:
31,000
120,000
160,000
6,950
16,700
334,650
$ 50,350
August
9,250
$ 1,017,500
610,500
407,000
Variable Cost
per unit
per unit
31,000
125,800
167,900
6,950
16,700
348,350
$ 58,650
Fixed Cost
September
9,750
$ 1,072,500
643,500
429,000
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.
Note: Round the Variable cost per unit to 2 decimal places.
Y =
Y =
31,000
131,600
175,800
6,950
16,700
362,050
$ 66,950
Formula
X
X

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