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. 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 83,500 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 $12.00 each and annual sales were to increase by 8.000 units. 4. Determine the change in proff if the company were to increase advertising by $115.000 and if this were to increase sales by 8.000 units. The St. Lucia Blood Bank, a private charity partly supported by government grants, is located on the Caribbean island of St. Lucla. The blood bank has just finished its operations for September, which was a particularly busy month due to a powerful hurricane that hit neighbouring isiands, causing mary injuries. The hurricane largely bypassed St. Lucia, but the residents of St. Lucia willingly donated their blood to help people on other islands. As a consequence, the blood bank collected and processed 24% more blood than had been originally planned for the month. A report prepared by a government official comparing actual costs to budgeted costs for the blood bank appears below, (The currency on St. Lucia is the East Carbbean dollat) Continued support from the government depends on the blood bank's ability to demonstrate control over its costs. The managing director of the blood bank was very unhappy with this report, claiming that his costs were higher than expected due to the emergency on the neighbouring islands. He also pointed out that the additional costs had been fuly covered by payments from grateful recipients on the other isiands. The govermment official who prepared the report countered that all of the figures had been submitted by the blood bank to the government; he was just pointing out that actual costs were a lot higher than promised in the budget. Required: 1. Prepare a new performance report for September using the flexible budget approach. (Note. Even though some of these costs might be clessified as direct costs rather than overhead, the flexible budget approach can still be used to prepare a flexble budget performance report). (indicate the effect of each variance by selecting "F" for fovourable, "U* for unfavourable, and "None" for no 1. Prepare a new performance report for September using the flexible budget approach. (Note. Even though some of these costs might be classified as direct costs rather than overhead, the flexible budget approach can still be used to prepare a flexible budget performance report). (indicate the effect of each varlance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance). Round "Cost Formula" answers to 2 decimal places)
