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		6,400			5,900			7,350			8,800
Sales revenue	$	768,000		$	708,000		$	882,000		$	1,056,000
Less: Cost of goods sold		408,100			382,320			458,640			538,560
Gross margin	$	359,900		$	325,680		$	423,360		$	517,440
Less: Operating expenses
Shipping expense	$	64,300		$	53,200		$	67,800		$	64,000
Advertising expense		91,000			91,000			91,000			91,000
Salaries and commissions		165,000			136,000			168,500			166,500
Insurance expense		16,000			16,000			16,000			16,000
Amortization expense		49,000			49,000			49,000			49,000
Total operating expenses	$	385,300		$	345,200		$	392,300		$	386,500
Net income	$	(25,400	)	$	(19,520	)	$	31,060		$	130,940

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.)

This question was answered but all answers for column 1 given were wrong. (Cost of goods sold, Shipping, and Salaries and Commission need to be corrected.)

Column 2 is $53.88/unit, $3.72/unit, and $10.53/unit

2. Assume that fixed costs are incurred uniformly throughout the year. Compute the annual break-even sales, and the profit if 82,000 units are sold during the year. (Round "Break-even sales" answer to nearest whole number.)

The entire solution available is incorrect.

3. Calculate the change in profit if the selling price were reduced by $11.50 each and annual sales were to increase by 7,800 units.

There is a decrease in profit, but what is the $ amount?

4. Determine the change in profit if the company were to increase advertising by $114,000 and if this were to increase sales by 7,800 units.

I believe this is an incremental profit of $290.664