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		6,500			6,000			6,750			7,100
Sales revenue	$	812,500		$	750,000		$	843,750		$	887,500
Less: Cost of goods sold		409,200			382,700			417,450			441,000
Gross margin		403,300			367,300			426,300			446,500
Less: Operating expenses
Shipping expense		73,600			68,600			76,850			78,500
Advertising expense		85,000			85,000			85,000			85,000
Salaries & commissions		187,600			171,300			188,050			195,500
Insurance expense		10,500			10,500			10,500			10,500
Depreciation expense		54,000			54,000			54,000			54,000
Total operating expenses		410,700			389,400			414,400			423,500
Net income	$	(7,400	)	$	(22,100	)	$	11,900		$	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.

2. Using the cost equations, prepare a contribution margin income statement (in good form) for September when 6,900 units are expected to be sold.