Do not give answer in image esSkate World is a merchandising company that sells skateboards both at its retail store and its online store. Results for the most recentthree months are shown below.Sales in unitsSales:Cost of goods soldGross marginSelling and administrative expenses:Advertising expenseShipping expenseSalaries and commissionsInsurance expenseDepreciation expenseTotal selling and administrative expensesOperating incomeExpensesCost of goods soldAdvertising expenseShipping expenseSalaries and commissionsInsurance expenseDepreciation expenseClassificationShipping expenseSalaries and commissionsVariableFixedMixedMixedRequired:1. Identify each of the company's expenses (including cost of goods sold) as either variable, fixed, or mixed.FixedFixedVariable CostJulyper unitper unitAugust4,5004,000$400,000 $450,000240,000 270,000160,000 180,000Fixed CostSeptember5,000$ 500,000300,000200,0002. Using the high-low method, separate each mixed expense into variable and fixed elements. State the cost formula for each mixedexpense21,00038,00090,0006,00015,000170,00021,00021,00034,00036,00078,00084,0006,0006,00015,00015,000154,000 162,000$ 6,000 $ 15,000 $ 30,000Formulaper unitper unit

The high low method is used to separate the fixed and variable costs from the mixed costs of…

Skate World is a merchandising company that sells skateboards both at its retail store and its online store. Results for the most recent three months are shown below Sales in units Sales Cost of goods sold Gross margin Selling and administrative expenses: Advertising expense Shipping expense Salaries and commissions Insurance expense Depreciation expense Total selling and administrative expenses Operating incone July August 4,000 $400,000 $450,000 4,500 240,000 270,000 160,000 100,000 21,000 34,000 76,000 6,000 35,000 154,000 $ 6,000 21,000 36,000 84,000 6,000 15,000 162,000 $ 15,000 September 5,000 $ 500,000 200,000 200,000 21,000 30,000 90,000 6,000 15,000 170,000 $ 30,000

Skate World is a merchandising company that sells skateboards both at its retail store and its online store. Results for the most recent three months are shown below Sales in units Sales Cost of goods sold Gross margin Selling and administrative expenses: Advertising expense Shipping expense Salaries and commissions Insurance expense Depreciation expense Total selling and administrative expenses Operating incone July August 4,000 $400,000 $450,000 4,500 240,000 270,000 160,000 100,000 21,000 34,000 76,000 6,000 35,000 154,000 $ 6,000 21,000 36,000 84,000 6,000 15,000 162,000 $ 15,000 September 5,000 $ 500,000 200,000 200,000 21,000 30,000 90,000 6,000 15,000 170,000 $ 30,000

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter2: Financial Statements And The Annual Report

Section: Chapter Questions

Problem 2.2AP

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