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Problem 8-8 Performing a Comprehensive CVP Analysis (LO2 CC5, 9) 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 June May 7,200 March 5,800 Sales in units Sales revenue Less: Cost of goods sold 6,300 8,600 $713,000 $643,000 $781,000 $853,000 439,000 376,500 348,500 385,500 $336,500 $294,500 $395,500 $414,000 Gross margin Less: Operating Expenses Shipping expense Advertising expense Salaries and commissions Insurance expense Amortization expense S 64,100 53,400 $ 67,600 89,500 168,000 15,500 48,500 89,500 164,700 15,500 48,500 89,500 136,500 15,500 48,500 64,500 89,500 167,000 15,500 48,500 Total operating expenses $382,300 $343,400 $389,100 $385,000 Net income $ (45,800) (48,900) $ 6,400 $ 29,000 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 Cost of goods sold Shipping Salaries & commission per unit per unit per unit 2. Assume that fixed costs are incurred uniformly throughout the year. Compute the annual profit if 80,500 units are sold during the year nnual profit (80500 units) 3. Calculate the change in profit if the selling price were reduced by $11.0 each and annual sales were to increase by 7,600 units