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
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
Survey of Accounting (Accounting I)
8th Edition
ISBN:9781305961883
Author:Carl Warren
Publisher:Carl Warren
Chapter12: Differential Analysis And Product Pricing
Section: Chapter Questions
Problem 12.4E
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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.
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