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Milden company has an exclusive franchise to purchase a product from the manufacturer and distribute it on the retail level. as an aid in planning, the company has decided to start using a contribution format income statement. to have data to prepare such a statement, the company has analyzed its expenses and has developed the following cost formulas: cost cost formulacost of good sold $26 per unit soldadvertising expense $183,000 per quartersales commissions 7% of salesshipping expense ? administrative salaries $93,000 per quarterinsurance expense $10,300 per quarterdepreciation expense $63,000 per quartermanagement has concluded that shipping expense is a mixed cost, containing both variable and fixed cost elements. units sold and the related shipping expense over the last eight quarters follow: quarter units sold shippingexpenseyear 1: first 29,000 $ 173,000second 31,000 $ 188,000third 36,000 $ 230,000fourth 32,000 $ 193,000year 2: first 30,000 $ 183,000second 33,000 $ 198,000third 47,000 $ 245,000fourth 44,000 $ 221,000milden company’s president would like a cost formula derived for shipping expense so that a budgeted contribution format income statement can be prepared for the next quarter. using the high-low method, estimate a cost formula for shipping expense
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