HW ch2,1 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:CostCost FormulaCost of good sold$26 per unit soldAdvertising expense$183,000 per quarterSales commissions7% of salesShipping expense?Administrative salaries$93,000 per quarterInsurance expense$10,300 per quarterDepreciation expense$63,000 per quarterManagement 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:QuarterUnits SoldShipping ExpenseYear 1: First29,000$173,000Second31,000$188 ,000Third36,000$230,000Fourth32,000 $193,000Year 2: First30,000$183,000Second33,000$198 ,000Third47,000$245,000Fourth44,000 $221,000Milden 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.