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The Central Valley Company is a manufacturing firm that produces and sells a single product. The companys revenues and expenses for the last four months are given below.

Central Valley Company Comparative Income Statement
	March			April				May			June
Sales in units		6,300			5,800			7,200			8,600
Sales revenue	$	762,300		$	701,800		$	871,200		$	1,040,600
Less: Cost of goods sold		405,450			378,972			453,024			530,706
Gross margin	$	356,850		$	322,828		$	418,176		$	509,894
Less: Operating expenses
Shipping expense	$	64,100		$	53,400		$	67,600		$	64,500
Advertising expense		89,500			89,500			89,500			89,500
Salaries and commissions		164,700			136,500			168,000			167,000
Insurance expense		15,500			15,500			15,500			15,500
Amortization expense		48,500			48,500			48,500			48,500
Total operating expenses	$	382,300		$	343,400		$	389,100		$	385,000
Net income	$	(25,450	)	$	(20,572	)	$	29,076		$	124,894

Required:

1. Management is concerned about the losses experienced during the spring and would like to know more about the cost behaviour. Develop a cost equation for each of the costs. (Do not round intermediate calculations. Round "Per Unit" answers to 2 decimal places.)

2. Assume that fixed costs are incurred uniformly throughout the year. Compute the annual break-even sales, and the profit if 80,500 units are sold during the year. (Round "Break-even sales" answer to nearest whole number.)

3. Calculate the change in profit if the selling price were reduced by $11.00 each and annual sales were to increase by 7,600 units.

4. Determine the change in profit if the company were to increase advertising by $113,000 and if this were to increase sales by 7,600 units.

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