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Wright State University Operations And Supply Chain Management Assignment Help - Cost Management


Question - Milden Company has an exclusive franchise to purchase a product from the manufacturer and
distribute it on the retail level. As an aid in planning, the company has decided to start using a
contribution format income statement. To have data to prepare such a statement, the company has
analyzed its expenses and has developed the following cost formulas:

Management has concluded that shipping expense is a mixed cost, containing both variable and fixed
cost elements. Units sold and the related shipping expenses over the last eight quarters follow:


Milden Company’s president would like a cost formula derived for shipping expense so that a
budgeted contribution format income statement can be prepared for the next quarter.
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