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

Central Valley Company Comparative Income Statement
	March			April				May			June
Sales in units		7,000			6,500			8,250			10,000
Sales revenue	$	798,000		$	741,000		$	940,500		$	1,140,000
Less: Cost of goods sold		424,000			400,140			489,060			581,400
Gross margin	$	374,000		$	340,860		$	451,440		$	558,600
Less: Operating expenses
Shipping expense	$	65,500		$	52,000		$	69,000		$	61,000
Advertising expense		100,000			100,000			100,000			100,000
Salaries and commissions		166,800			133,000			171,500			163,500
Insurance expense		19,000			19,000			19,000			19,000
Amortization expense		52,000			52,000			52,000			52,000
Total operating expenses	$	403,300		$	356,000		$	411,500		$	395,500
Net income	$	(29,300	)	$	(15,140	)	$	39,940		$	163,100

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.)

2. Assume that fixed costs are incurred uniformly throughout the year. Compute the annual break-even sales, and the profit if 91,000 units are sold during the year. (Round "Break-even sales" answer to nearest whole number.)

3. Calculate the change in profit if the selling price were reduced by $14.50 each and annual sales were to increase by 9,000 units.

4. Determine the change in profit if the company were to increase advertising by $120,000 and if this were to increase sales by 9,000 units.