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

Required: 1.

Management is concerned about the losses experienced during the spring and would like to know more about the cost behavior. Develop a cost equation for each of the costs.

Sales in units Sales revenue Less: Cost of goods sold Gross margin Less: Operating expenses Shipping expense Advertising expense Salaries & commissions Insurance expense Depreciation expense Total operating expenses Net income Central Valley Company Comparative Monthly Income Statements March April 5,100 $703,800 368,700 335,100 62,100 71,000 164,800 9,100 40,000 347,000 $ (11,900) 4,600 $634,800 342,200 292,600 57,100 71,000 149,500 9,100 40,000 326,700 $ (34,100) May 5,350 $738,300 376,950 361,350 65,350 71,000 164,750 9,100 40,000 350,200 $ 11,150 June 6,200 $855,600 427,000 428,600 71,500 71,000 181,500 9,100 40,000 373,100 $ 55,500