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. Central Valley Company Comparative Monthly Income Statements March April 6,900 6,400 $834,900 $774,400 415,000 390,000 419,900 384,400 May 7,150 $865,150 422,500 442,650 June 7,500 $907,500 445,000 462,500 Sales in units Sales revenue Less: Cost of goods sold Gross margin Less: Operating expenses Shipping expense Advertising expense Salaries & commissions Insurance expense Depreciation expense Total operating expenses Net income 75,600 89,000 192,200 10,900 58,000 425,700 $ (5,800) 70,600 89,000 176,400 10,900 58,000 404,900 $(20,500) 78,850 89,000 192,400 10,900 58,000 429, 150 $ 13,500 80,500 89,000 199,500 10,900 58,000 437,900 $ 24,600 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. COGS Y = X Y = Shipping Salaries and commissions +++ + + + X Y = x 2. Using the cost equations, prepare a contribution margin income statement (in good form) for September when 7,300 units are expected to be sold. CENTRAL VALLEY COMPANY Contribution Income Statement For the month ended September 30 Variable costs: Less fixed costs