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PROBLEM 2-18 Cost Behavior: High & Low Method: Contribution Format
Income Statement
1. Identify each of the companys expenses (including cost of goods sold) as
either variable, fixed or mixed.
Shipping expense:
Volume Cost
High 4500 56000
Low 3000 44000
Difference 1500 12000
High Low
Total Cost 143000 107000
Variable Cost 108000 72000
Fixed Cost 35000 35000
3. Redo the company statement at the 4500 unit level of activity using the
contribution format: