Morrisey & Brown, Limited, is the sole distributor of a product with growing sales. Its income statements for the three most recent months follow: Morrisey & Brown, Limited Income Statements For the Three Months Ended September 30 July 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 Net operating income 6,750 $ 742,500 445,500 297,000 33,800 69,500 125,000 9,900 22,100 260,300 $36,700 August 7,250 $ 797,500 478,500 319,000 33,800 73,700 132, 100 9,900 22,100 271, 600 $ 47,400 September 7,750 $ 852,500 511,500 341,000 33,800 77,900 139,200 9,900 22,100 282,900 $ 58,100 Required: 1. By analyzing 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 7,750-unit level of activity using the contribution format.

[The following information applies to the questions displayed below.]Ferris Company began January with 4,000 units of its principal product. The cost of each unit is $7. Merchandise transactions for the month of January are as follows:    Purchases Date of Purchase Units   Unit Cost* Total Cost Jan. 10 3,000   $ 8     $ 24,000   Jan. 18 4,000     9       36,000   Totals 7,000             60,000     * Includes purchase price and cost of freight.    Sales Date of Sale Units   Jan. 5 2,000   Jan. 12 1,000   Jan. 20 3,000   Total 6,000      5,000 units were on hand at the end of the month.   2. Calculate January's ending inventory and cost of goods sold for the month using LIFO, periodic system.

The data shown were obtained from the financial records of Italian Exports, Inc., for March: Estimated Sales $580,000 Sales 567,930 Purchases 294,832 Ending Inventory* 10% Administrative Salaries 50,280 Marketing Expense** 5% Sales Commissions 2% Rent Expense 7,700 Depreciation Expense 1,200 Utilities 2,500 Taxes*** 15% *of next month's sales **of estimated sales ***of income before taxes Sales are expected to increase each month by 10%. Prepare a budgeted income statement. Round your answers to the nearest dollar. Italian Exports, Inc.Budgeted Income StatementFor the Month Ending Mar. 31, 2020   $Sales Cost of Goods Sold     $Beginning Inventory   Purchases   $Cost of Goods Available for Sale   Ending Inventory   $Cost of Goods Sold   Gross Profit Operating Expenses     $Administrative Salaries   Marketing Expenses   Sales Commissions   Rent Expense   Depreciation Expense   Utilities Total…

The following data relate to the operations of Shilow Company, a wholesale distributor of consumer goods:   Current assets as of March 31:   Cash $ 9,100 Accounts receivable $ 26,400 Inventory $ 49,200 Building and equipment, net $ 106,800 Accounts payable $ 29,550 Common stock $ 150,000 Retained earnings $ 11,950   The gross margin is 25% of sales. Actual and budgeted sales data:   March (actual) $ 66,000 April $ 82,000 May $ 87,000 June $ 112,000 July $ 63,000   Sales are 60% for cash and 40% on credit. Credit sales are collected in the month following sale. The accounts receivable at March 31 are a result of March credit sales. Each month’s ending inventory should equal 80% of the following month’s budgeted cost of goods sold. One-half of a month’s inventory purchases is paid for in the month of purchase; the other half is paid for in the following month. The accounts payable at March 31 are the result of March purchases of inventory.…