Arnall ltd., a british merchandising company, is the exclusive distributor of a product that is gaining rapid market acceptance. the company’s revenues and expenses (in british pounds) for the last three months are given below: arnall ltd. comparative income statementsfor the three months ended june 30april may june sales in units 1,900 4,900 5,900 sales revenue £ 323,000 £ 833,000 £ 1,003,000 cost of goods sold 134,900347,900 418,900 gross margin 188,100 485,100 584,100 selling and administrative expenses: shipping expense 34,100 64,100 74,100 advertising expense 58,000 58,000 58,000 salaries and commissions 109,800 235,800 277,800 insurance expense 7,200 7,200 7,200 depreciation expense 48,000 48,000 48,000 total selling and administrative expenses 257,100 413,100 465,100 net operating income (loss) £ (69,000) £ 72,000 £ 119,000required: 1. identify each of the company’s expenses (including cost of goods sold) as either variable, fixed, or mixed. expenses classificationcost of goods sold variableshipping expense mixedadvertising expense fixedsalaries and commissions mixedinsurance expense fixeddepreciation expense fixed 2. using the high-low method, separate each mixed expense into variable and fixed elements. state the cost formula for each mixed expense. (enter mixed expenses in the order of company expenses provided under question.)variable cost fixed cost formulaper unit y = + xper unit y = + x 3. redo the company’s income statement at the 5,900-unit level of activity using the contribution format.2. using the high-low method, separate each mixed expense into variable and fixed elements. state the cost formula for each mixed expense. (enter mixed expenses in the order of company expenses provided under question.)