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		5,500			5,000			6,000			7,000
Sales revenue	$	726,000		$	660,000		$	792,000		$	924,000
Less: Cost of goods sold		384,250			356,400			411,840			471,240
Gross margin	$	341,750		$	303,600		$	380,160		$	452,760
Less: Operating expenses
Shipping expense	$	62,500		$	55,000		$	66,000		$	68,500
Advertising expense		77,500			77,500			77,500			77,500
Salaries and commissions		162,300			140,500			164,000			178,000
Insurance expense		11,500			11,500			11,500			11,500
Amortization expense		44,500			44,500			44,500			44,500
Total operating expenses	$	358,300		$	329,000		$	363,500		$	380,000
Net income	$	(16,550	)	$	(25,400	)	$	16,660		$	72,760

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 71,000 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 $6.50 each and annual sales were to increase by 6,000 units.

4. Determine the change in profit if the company were to increase advertising by $105,000 and if this were to increase sales by 6,000 units.