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		6,900			6,400			8,100			9,800
Sales revenue	$	793,500		$	736,000		$	931,500		$	1,127,000
Less: Cost of goods sold		421,350			397,440			484,380			574,770
Gross margin	$	372,150		$	338,560		$	447,120		$	552,230
Less: Operating expenses
Shipping expense	$	65,300		$	52,200		$	68,800		$	61,500
Advertising expense		98,500			98,500			98,500			98,500
Salaries and commissions		166,500			133,500			171,000			164,000
Insurance expense		18,500			18,500			18,500			18,500
Amortization expense		51,500			51,500			51,500			51,500
Total operating expenses	$	400,300		$	354,200		$	408,300		$	394,000
Net income	$	(28,150	)	$	(15,640	)	$	38,820		$	158,230

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 89,500 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 $14.00 each and annual sales were to increase by 8,800 units.

4. Determine the change in profit if the company were to increase advertising by $119,000 and if this were to increase sales by 8,800 units.