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		5,600			5,100			5,850			6,100
Sales revenue	$	772,800		$	703,800		$	807,300		$	841,800
Less: Cost of goods sold		404,500			377,000			413,250			432,000
Gross margin		368,300			326,800			394,050			409,800
Less: Operating expenses
Shipping expense		70,000			65,000			73,250			74,000
Advertising expense		76,000			76,000			76,000			76,000
Salaries & commissions		179,300			161,500			180,500			186,500
Insurance expense		9,600			9,600			9,600			9,600
Depreciation expense		45,000			45,000			45,000			45,000
Total operating expenses		379,900			357,100			384,350			391,100
Net income	$	(11,600	)	$	(30,300	)	$	9,700		$	18,700

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 6,000 units are expected to be sold.