CENTRAL VALLEY COMPANY Comparative Income Statement for the Second Quarter April 4,500 $630,000 252,000 May 5,250 $735,000 294,000 June 6,000 $840,000 336,000 378,000 504,000 441,000 Sales in units Sales revenue Less: cost of goods sold Gross margin Less: operating expenses Shipping expense Advertising expense Salaries and commissions Insurance expense Depreciation expense Total operating expenses Net income 56,000 70,000 143,000 63,500 70,000 161,750 71,000 70,000 180,500 9,000 9,000 42,000 320,000 9,000 42,000 346,250 42,000 372,500 $94,750 $131,500 $58,000 Required: 1. Which expenses are true fixed costs? State the cost formula for each fixed cost. (2 marks) 2. Which expenses are true variable costs? State the cost formula for each variable cost. (2 marks) 3. Which expenses are mixed costs? By use of the high-low method, separate each mixed cost into its variable and fixed components. State the cost formula for each mixed cost. (7 marks) 4. Based on your answers to parts 1 to 3 of this question above, determine and state the cost formula for this company's total costs. (2 marks) 5. Construct a detailed income statement in contribution format for the month of July assuming that sales for the month will be 5,500 units. (7 marks) 6. Determine the company's contribution margin per unit sold. If sales in August were to increase by 150 units over July, predict directly what the increase in operating income would be from July to August, and what the operating income would be for August. You do not need to prepare an income statement to answer this