Question
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
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 Comparative Monthly Income Statements Sales in units Sales revenue Less: Cost of goods sold Gross margin Less: Operating expenses Shipping expense Advertising expense Salaries & commissions Insurance expense Depreciation expense Total operating expenses Net income March April May June 5,300 4,800 $726,100 $657,600 5,550 $760,350 379,500 352,000 388,250 6,200 $849,400 429,000 346,600 305,600 372,100 420,400 64,900 59,900 68,150 72,500 73,000 73,000 73,000 73,000 163,600 144,300 165,550 183,500 9,300 9,300 9,300 9,300 42,000 352,800 42,000 42,000 $ (6,200) 328,500 $(22,900) 358,000 42,000 380,300 $ 14,100 $ 40,100 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 + Shipping Y = + Salaries and commissions Y = +
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