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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
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 85,000 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 $12.50 each and annual sales were to increase by 8,200 units. 4. Determine the change in profit if the company were to increase advertising by $116,000 and if this were to increase sales by 8,200 units
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