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 Monthly Income Statements
		March			April			May			June
Sales in units		6,700			6,200			6,950			7,100
Sales revenue	$	837,500		$	775,000		$	868,750		$	887,500
Less: Cost of goods sold		422,200			396,200			430,200			443,000
Gross margin		415,300			378,800			438,550			444,500
Less: Operating expenses
Shipping expense		76,400			71,400			79,650			79,500
Advertising expense		87,000			87,000			87,000			87,000
Salaries & commissions		193,600			176,800			194,300			197,500
Insurance expense		10,700			10,700			10,700			10,700
Depreciation expense		56,000			56,000			56,000			56,000
Total operating expenses		423,700			401,900			427,650			430,700
Net income	$	(8,400	)	$	(23,100	)	$	10,900		$	13,800

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.

COGS	Y	=		+		X
Shipping	Y	=		+		X
Salaries and Comissions	Y	=		+		X

2. Using the cost equations, prepare a contribution margin income statement (in good form) for September when 7,000 units are expected to be sold.