Milden Company is a distributor who wants to start using a contribution format Income statement for planning purposes. Thecompany has analyzed Its expenses and developed the following cost formulas:Cost Formula$22 per unit sold$172,000 per quarter5% of salesCostCost of good soldAdvertising expenseSales commissionsShipping expenseAdministrative salaries$82,e00 per quarter$9, 200 per quarter$52,e00 per quarterInsurance expenseDepreciation expenseBecause shipping expense is a mixed cost, the company needs to estimate the varlable shipping expense per unit sold andthe fixed shipping expense per quarter using the following data:ShippingExpenseQuarterYear 1:Units Sold$ 162,000$ 177,809$ 219,800$ 182,889First18,80820,00025,000SecondThirdFourth21,000Year 2:$ 172,000$ 187,800$ 234,000$ 210,008First19,00022,00030,00027,000SecondThirdFourthRequired:1. Using the high-ow method, estimate a cost formula for shipping expense In the form Y= a - bX.2 In the first quarter of Year 3, the company plans to sell 25,000 units at a selling price of $52 per unit. Prepare a contributionformat Income statement for the quarter.Complete this question by entering your answers in the tabs below.Required 1Required 2Using the high-low method, estimate a cost formula for shipping expense in the form Y = a + bx. (Round the Variable costper unit to 2 decimal places.) Year 1:$ 162,880$ 177,000$ 219,000$ 182,000First18,00020,00825,00021,000SecondThirdFourthYear 2:FirstSecondThird19,00022,00030,00027,880$ 172,000$ 187,000$ 234,000$ 210,880FourthRequired:1. Using the high-low method, estimate a cost formula for shipping expense in the form Y=a - bX.2 In the first quarter of Year 3, the company plans to sell 25,000 units at a selling price of $52 per unit. Prepare acontribution format Income statement for the quarter.Complete this question by entering your answers in the tabs below.Required 1Required 2In the first quarter of Vear 3, the company plans to sell 25,000 units at a selling price of $52 per unit. Prepare a contributionformat income statement for the quarter.Milden CompanyBudgeted Contribution Format Income StatementFor the First Quarter, Year 3Variable expenses:Total variable expensesFixed expenses:Total fixed expenses

High-low method refers to a technique used by the company to determine the variable cost component…

Required: 1. Using the high-low method, estimate a cost formula for shipping expense in the form Y =a - bX. 2. In the first quarter of Year 3, the company plans to sell 25,000 units at a selling price of $52 per unit. Prepare a contribution format Income statement for the quarter.

Required: 1. Using the high-low method, estimate a cost formula for shipping expense in the form Y =a - bX. 2. In the first quarter of Year 3, the company plans to sell 25,000 units at a selling price of $52 per unit. Prepare a contribution format Income statement for the quarter.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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