1. The Johnston Company had the following costs based on the production and sale of 40,000 units: (Denominator level) Direct Materials $5 per unit Direct Labor $8 per unit Variable Manufacturing Overhead $3 per unit Fixed Manufacturing Overhead $4 per unit Sales Commissions 10% of Sales Fixed Selling & Administrative Costs $9 per unit Other information: The company had the following actual sales for November and budgeted sales for December, January, and February: Month November December January February Sales (in units) 45,000 50,000 60,000 30,000 Selling Price per unit $40/unit $42/unit $45/unit $35/unit The company has a policy of always maintaining the following inventory levels: Finished Goods Inventory = 1,000 units plus 10% of next month's sales. . Direct Materials Inventory = $2,000 plus 30% of next month's production requirements. . The company's sales and collection history shows that 10% of all sales are for cash and the accounts receivable are collected in the following way: 70% in the month of the sale 28% in the month after the sale A cash balance of $10,000 is maintained at all times (any shortages are borrowed and any excess funds are used to retire debt) 700%