Morrisey Brown Ltd of Sydney is a merchandising company tha

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:

240,000

Using the high-low method, separate each mixed expense into variable and fixed elements. State the cost formula for each mixed expense

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:

Solution

2 Salaries and commissions variable cost per unit = (90000-78000)/(5000-4000)= 12 Fixed expense = 90000-(5000*12) = 30000 Formula = 30000+12 per unit Shipping variable cost per unit = (38000-34000)/(5000-4000)= 4 Fixed expense = 38000-(5000*4) = 18000 Formula = 18000+4 per unit