Maryland Novelties Company Produces and Sells Souvenir Products Required:
1)Identify the Mixed Expense(s)

Maryland Novelties Company produces and sells souvenir products.Monthly income statements for two activity levels are provided below:
$\begin{array}{lrr}\text { Unit volumes } & 20,000 \text { units } & 30,000 \text { units } \\\text { Revenue } & \$ 150,000 & \$ 225,000 \\\text { Less cost of goods sold } & 60,000 & 90,000\\\text { Gross margin } & \$ 90,000 & \$ 135,000 \\\text { Less operating expenses } & & \\\text { Salaries and commissions } & 20,000 & 25,000\\\text { Advertising expenses } & 30,000& 30,000 \\\text { Administrative expenses } & 12,500 & 12,500 \\\text { Total operating expenses } & 62,500& 67,500 \\\text { Net income } & \$ 27,500 & \$ 67,500\end{array}$ Required:
1)Identify the mixed expense(s).
2)Use the high-low method to separate the mixed costs into variable and fixed components.
3)Prepare a contribution margin income statement at the 20,000-unit level.