Redo the company's income statement at the 5,000-unit level of activity using the contribution format.

Using the high-low method, separate each mixed expense into variable and fixed elements. State the cost formula for each mixed expense. (Omit the "£" sign in your response.)

Shipping Expense:

(86,200 - 45,900) / (5,100 - 2,000) = £13 variable cost per unit

86,200 - (13 x 5,100) = £19,900 fixed cost

£ Y = £19,900 + £13 X

Salaries and Commissions

(238,400 - 114,400) / (5,100 - 2,000) = £40 variable cost per unit

238,400 - (40 x 5,100) = £34,400 fixed cost

£ Y = £34,400 + £40 X

3.

Redo the company’s income statement at the 5,100-unit level of activity using the contribution format. (Input all amounts as positive values except losses which should be indicated by a minus sign. Omit the "£" sign in your response.)

Frankel Ltd.

Income Statement

For the Month Ended June 30

Sales revenue 912900

Variable expenses:

Cost of goods sold 346800

Shipping expenses 5,100 x 13 = 66,300

Commissions 5,100 x 40 = 204,000

Contribution margin 295,800

Fixed expenses:

Fixed shipping 19,900

Insurance expenses 9000

Depreciation expenses 42700

Sales salaries 34,400

Advertising expenses 69200

Net operating Income 120600