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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

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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 Marchi April 5.200 4,700 $728.000 5658,000 354,500 357, Bee 343,200 300,200 May 5,450 $763,000 393100 369, 700 June 6,000 $840,000 420.000 412.000 Sales in units Sales revenue Less: Cost of goods sold Gross margin Lesst Operating expenses Shipping expense Advertising expense Salaries & comissions Insurance expense Depreciation expense Total operating expenses Net Income 65,00 72,000 170,200 9,200 41.000 357200 $(14,500) 60,300 72,000 153,900 9.200 41.000 336,400 5036,200 68,550 72.000 170,650 9.200 41,000 361, 100 $3,300 72,000 72.000 162,500 9,200 $1,000 376720 $ 35,300 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 She ++ + + 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, Y COGS Shipping Salaries and commissions Y Y + -- X X X 2. Using the cost equations, prepare a contribution margin income statement in good form) for September when 5,800 units are expected to be sold CENTRAL VALLEY COMPANY Contribution Income Statement For the month ended September 30 Sales Variable costs 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 March April May June Sales In units 5.200 4,700 5,450 6,000 Sales revenue $728.000 5658,000 $763,000 $600,000 Less: Cost of goods sold 384,800 357.800 393,300 425.000 Gross margin 343,200 300,200 369,700 412.000 Less Operating expenses Shipping expense 65,300 50,00 68,550 72,000 Advertising expense 72,000 72,000 22.000 72,000 Salaries & commissions 170,200 153,900 170,650 182,500 Insurance expense 9.200 9,200 9.200 9,200 Depreciation expense 43.000 41,000 41.000 41,000 Total operating expenses 257700 336.400 361,00 376.700 Net income $(14,500) 5(36,200) $3,300 $ 35,00 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

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