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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
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 March April May June Sales in units Sales revenue Less: Cost of goods sold 6,900 6,400 7,150 5834,900 415,000 S774,400 390,000 5885,150 422,500 7,500 5907,500 445,000 Gross Less: Operating expenses 419,900 384,400 442,650 462500 Shipping expense Salaries & commissions Depreciation expense 75,600 89,000 70,600 89,000 176,400 10,900 58,000 78,850 89,000 192,400 10,900 58,000 80,500 89,000 199,500 10,900 58,000 192,200 10,900 58,000 Total operating expenses 425,700 404,900 429,150 437.900 Net income S (5,800) (20,500) 13,500 24,600 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. COGS Shipping 2. Using the cost equations, prepare a contribution margin income statement (in good form) for September when 7,300 units are expected to be sold. CENTRAL VALLEY COMPANY For the month ended September 30 Variable costs: Less fixed costs
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