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		6,700			6,200			7,800			9,400
Sales revenue	$	717,000		$	647,000		$	797,000		$	857,000
Less: Cost of goods sold		378,500			350,500			387,500			443,000
Gross margin	$	338,500		$	296,500		$	409,500		$	414,000
Less: Operating Expenses
Shipping expense	$	64,900		$	52,600		$	68,400		$	62,500
Advertising expense		95,500			95,500			95,500			95,500
Salaries and commissions		165,900			134,500			170,000			165,000
Insurance expense		17,500			17,500			17,500			17,500
Amortization expense		50,500			50,500			50,500			50,500
Total operating expenses	$	394,300		$	350,600		$	401,900		$	391,000
Net income	$	(55,800	)	$	(54,100	)	$	7,600		$	23,000

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.

Correct answer was already determined as follows:

Cost of goods sold	=	$171,246	+	28.91	per unit
Shipping	=	$33,454	+	3.09	per unit
Salaries & commission	=	$75,418	+	9.53	per unit

2.	Assume that fixed costs are incurred uniformly throughout the year. Compute the annual profit if 86,500 units are sold during the year.

3.	Calculate the change in profit if the selling price were reduced by $13.0 each and annual sales were to increase by 8,400 units.

4.	Determine the change in profit if the company were to increase advertising by $117,000 and if this were to increase sales by 8,400 units.
	Important Additional Notes! - Selling Price is supposed to be determined by the figures provided in March, as the "selling prices" are not consistent across all months. This is a flaw in the question. - Unfortunately, the question does not indicate how the selling price number for March should be rounded. Since 717,000 / 6700 = 107.0149254, this presents precisely the issue I am having with the question. - However, the answer for Question 3, which was correct when I checked my work, was determined to be $683,668 when Selling Price was left @ $107.01. - At the same time, answers to Questions 2 and 4 were incorrect, at $3,421,902 and $433,032 respectively, but selling price was left @ $107.01 in question 2 as well. - I just wanted to see if there are any major flaws in my arithmetic when the selling price is given at $107.01. This might explain why my answers to 2 and 4 came back as incorrect. - Alternatively, I'd like to know if the answer to question 3 (683,668) can be found if the decimals are input differently. This may be another avenue by which I can get the question right.