Victor and crystal run a catering business in which they have two major tasks: getting new clients and preparing food for events and parties. it takes victor 15 hours to prepare the food for an event and 3 hours of effort to get each new client. for crystal, it takes 4 hours to prepare food for an event and 2 hours to get a new client. in this an absolute advantage in food preparation, a comparative advantage in food preparation. suppose that initially victor and crystal are both doing both tasks. then they decide to start shifting some work according to the principle of comparative advantage. in particular, the person with the comparative advantage in food preparation will take over preparing food for one more event, and the other person will use the freed-up time to get more clients. as a result, the total number of events for which food is prepared will remain unchanged, but the number of new clients will increase by a2 b1 c3 d4

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: cost cost formula cost of good sold $35 per unit sold advertising expense $210,000 per quarter sales commissions 6% of sales shipping expense ? administrative salaries $145,000 per quarter insurance expense $9,000 per quarter depreciation expense $76,000 per quarter management has concluded that shipping expense is a mixed cost, containing both variable and fixed cost elements. units sold and the related shipping expense over the last eight quarters follow: quarter units sold shipping expense year 1: first 10,000 $ 119,000 second 16,000 $ 175,000 third 18,000 $ 190,000 fourth 15,000 $ 164,000 year 2: first 11,000 $ 130,000 second 17,000 $ 185,000 third 20,000 $ 210,000 fourth 13,000 $ 147,000 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. required: 1. using the high-low method, estimate a cost formula for shipping expe