PROBLEM 3-16 Cost Behaviour: High-Low Method; Contribution Format Income Statement LOL. LO26.03 Skate World is a merchandising company that sells skateboards both at its retail store and its online...

PROBLEM 3-16 Cost Behaviour: High-Low Method; Contribution Format Income Statement LOL. LO26.03 Skate World is a merchandising company that sells skateboards both at its retail store and its online store. Results for the most recent three months are shown below. July August September Sales in units 4.000 4.500 5,000 Sales S400.000 $450,000 $500,000 Cost of goods sold 270.000 240.000 160.000 200.000 200.000 Gross margin 180.000 Selling and administrative expenses Advertising expense 21,000 21.000 34,000 21,000 36,000 Shipping expense 38,000 Salaries and commissions 78.000 84.000 90,000 Insurance expense 6,000 6,000 6,000 Depreciation expense 15.000 15.000 Total selling and administrative 15.000 154.000 S6,000 162.000 $18,000 170,000 30,000 Operating income Required: 1. Identify each of the company's 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. State the cost formula for each mixed expense 3. Redo the company's income statement for September using the contribution format?