March	April	May	June
Sales in units	$ 5000	4500	5250	6000
Sales revenue	700000	630000	735000	840000
Less:Cost of good sold	370000	342000	379000	426000
Gross margin	330000	288000	356000	414000
Less:operating expenses
Shipping expense	61500	56000	65000	71000
Advertising expense	70000	70000	70000	70000
Salaries & commisions	160800	143000	161500	180500
Insurance expense	9000	9000	9000	9000
Amortization expense	42000	42000	42000	42000
Total operating expense	343000	320000	347500	372500
Net income	(13300)	(32000)	8500	41500

The Corporation (TC) is a manufacturing firm that produces and sells a single product. The companys 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 behaviour. Develop a cost equation for each of the costs. 2. Assume that fixed costs are incurred uniformly throughout the year. Compute the annual break-even sales and the profit if 66,000 units are sold during the year. 3. Calculate the change in profit if the selling price were reduced by $4.00 each and annual sales were to increase by 5,000 units. 4. Determine the change in profit if the company were to increase advertising by $100,000 and if this were to increase sales by 5,000 units.