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		5,400			4,900			5,850			6,800
Sales revenue	$	718,200		$	651,700		$	778,050		$	904,400
Less: Cost of goods sold		381,600			351,918			404,586			461,244
Gross margin	$	336,600		$	299,782		$	373,464		$	443,156
Less: Operating expenses
Shipping expense	$	62,300		$	55,200		$	65,800		$	69,000
Advertising expense		76,000			76,000			76,000			76,000
Salaries and commissions		162,000			141,000			163,500			178,500
Insurance expense		11,000			11,000			11,000			11,000
Amortization expense		44,000			44,000			44,000			44,000
Total operating expenses	$	355,300		$	327,200		$	360,300		$	378,500
Net income	$	(18,700	)	$	(27,418	)	$	13,164		$	64,656

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 70,000 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 $6.00 each and annual sales were to increase by 5,800 units.

4. Determine the change in profit if the company were to increase advertising by $104,000 and if this were to increase sales by 5,800 units.