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.

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The Central Valley Company is a manufacturing ?rm that produces and sells a single product. Thecompany's revenues and expenses for the last four months are given below. Central Valley CompanyComparative Income Statement March April May June Sales in units 6,500 6,000 7,500 9,000 Sales revenue $773,500 $714,000 $892,500 $1,071,000 Less: Cost of goods sold 410,750 385,560 464,100 546,210 Gross margin $362,750 $328,440 $428,400 $ 524,790Less: Operating Expenses Shipping expense $ 64,500 $ 53,000 $ 68,000 $ 63,500 Advertising expense 92,500 92,500 92,500 92,500 Salaries and commissions 165,300 135,500 169,000 166,000 Insurance expense 16,500 16,500 16,500 16,500 Amortization expense 49,500 49,500 49,500 49,500 Total operating expenses $388,300 $347,000 $395,500 $ 388,000 Net income $ (25,550) $ (18,560) $ 32,900 $ 136,790 Required: 1. Management is concerned about the losses experienced during the spring and would like to know moreabout the cost behaviour. Develop a cost equation for each of the costs. (Do not round intermediatecalculations. Round "Per Unit" answers to 2 decimal places.) —H-I- MH-I-mco H-l-m 2. Assume that ?xed costs are incurred uniformly throughout the year. Compute the annual break-even sales, and the pro?t if 83,500 units are sold during the year. (Round "Break-even sales" answer tonearest whole number.) Annual profit (83,500 units) _- 3. Calculate the change in pro?t if the selling price were reduced by $12.0 each and annual sales were toincrease by 8,000 units. ::| 4. Determine the change in pro?t if the company were to increase advertising by $115,000 and if this wereto increase sales by 8,000 units. :ZI