Problem 8-8 Performing a Comprehensive CVP Analysis (LO2 - CC5, 6) 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 Income Statement March 6,200 ril 5,700 May 7,050 June Sales in units Sales revenue Less: Cost of goods sold 8,400 $762,600 $701,100 $867,150 $1,033,200 526,932 402,800 378,594 450,918 $359,800 $322,506 $416,232 $ 506,268 Gross margin Less: Operating Expenses Shipping expense Advertising expense Salaries and commissions Insurance expense Amortization expense 88,000 164,400 15,000 48,000 63,900 53,600 $ 67,400 88,000 167,500 15,000 48,000 88,000 137,000 15,000 48,000 65,000 88,000 171,500 15,000 48,000 Total operating expenses $379,300 $341,600 $385,900 387,500 Net income $ (19,500) (19,094) $ 30,332 $ 118,768 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.) Cost of goods sold Shipping Salaries & commission55,722+14.26 per unit 65,43654.94per unit 29,5334.22 per unit 2. Assume that fixed costs are incurred uniformly throughout the year. Compute the annual break-even sales, and the profit if 79,000 units are sold during the year. (Round "Break-even sales" answer to nearest whole number.) 73,022 units 296,404 Break-even sales Annual profit (79,000 units) 3. Calculate the change in profit if the selling price were reduced by $10.5 each and annual sales were to increase by 7,400 units. Decrease in profit 4. Determine the change in profit if the company were to increase advertising by $112,000 and if this were to increase sales by 7,400 units. Incremental profit $ 255,009