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Please help me solve this Problem 8-8 Performing a Comprehensive CVP Analysis (LO2 CC5, 6) The Central Valley Company is a manufacturing firm that produces
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Problem 8-8 Performing a Comprehensive CVP Analysis (LO2 CC5, 6) The Central Valley Company is a manufacturing firm that produces and sells a single product. The company's revenues and expenses for the last four months are given below Central Valley Company Comparative Income Statement March ril 6,100 June ay 7,650 Sales in units Sales revenue Less: Cost of goods sold 6,600 9,200 $778,800 $719,800 $902,700 $1,085,600 413,400 388,692 469,404 553,656 $365,400 $331,108 $433,296 $ 531,944 Gross margin Less: Operating Expenses Shipping expense Advertising expense Salaries and commissions Insurance expense Amortization expense 94,000 165,600 17,000 50,000 64,700 52,800 94,000 135,000 17,000 50,000 94,000 169,500 17,000 50,000 68,200 63,000 94,000 165,500 17,000 50,000 Total operating expenses $391,300 $348,800 $398,700 $ 389,500 Net income $ (25,900) $(17,692) 34,596 $142,444 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.) Cost of goods sold Shipping Salaries & commission67,38011.10 per unit 64,124 22,476 53.21 per unit 4.97 per unit 2. Assume that fixed costs are incurred uniformly throughout the year. Compute the annual break-even sales, and the profit if 85,000 units are sold during the year. (Round "Break-even sales" answer to nearest whole number.) Break-even sales units Annual profit (85,000 units) 3. Calculate the change in profit if the selling price were reduced by $12.5 each and annual sales were to increase by 8,200 units. 4. Determine the change in profit if the company were to increase advertising by $116,000 and if this were to increase sales by 8,200 unitsStep by Step Solution
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