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		6,200			5,700			6,450			6,800
Sales revenue	$	799,800		$	735,300		$	832,050		$	877,200
Less: Cost of goods sold		405,600			378,600			414,100			438,000
Gross margin		394,200			356,700			417,950			439,200
Less: Operating expenses
Shipping expense		72,100			67,100			75,350			77,000
Advertising expense		82,000			82,000			82,000			82,000
Salaries & commissions		183,400			166,100			184,350			192,500
Insurance expense		10,200			10,200			10,200			10,200
Depreciation expense		51,000			51,000			51,000			51,000
Total operating expenses		398,700			376,400			402,900			412,700
Net income	$	(4,500	)	$	(19,700	)	$	15,050		$	26,500

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 6,500 units are expected to be sold.