Acct

Morrisey & Brown, Ltd., 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:

Morrisey & Brown, Ltd.

Income Statements

For the Three Months Ended September 30

July August September

Sales in units 1,900 3,500 5,250

Sales revenue A$ 342,000 A$ 630,000 A$ 945,000

Cost of goods sold 127,300 234,500 351,750

Gross margin 214,700 395,500 593,250

Selling and Administrative

Expenses:

Advertising 69,800 69,800 69,800

Shipping Expense 47,300 69,700 94,200

Salaries and Commissions 107,100 167,900 234,400

Insurance Expense 9,700 9,700 9,700

Depreciation Expense 42,200 42,200 42,200

Total Selling and Administrative 276,100 359,300 450,300

Expenses:

Net Operating Income (loss) A$ (61,400) A$ 36,200 A$ 142,950

(NOTE: The Australian dollar is denoted here by A$)

Identify each of the company’s expenses (including cost of goods sold) as either variable, fixed, or mixed.

Expenses Classification

Cost of Goods Sold ___________

Advertising Expense ___________

Shipping Expense ___________

Salaries and Commissions ___________

Insurance Expense ___________

Depreciation Expense ___________

Options for Above (Fixed, Variable, or Mixed)

Requirement 2:

a) Using the high-low method, separate each mixed expense into variable and fixed elements (Omit the “A$” sign in your response)

__________________ ___________________

Options for above: Options for above:

Insurance Expense Cost of Goods Sold

Shipping Expense Insurance Expense

Advertising Expense Advertising Expense

Cost of Goods...