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Cortez Company is planning to introduce a new product that will sell for $105 per unit. The following manufacturing cost estim. have been made on
Cortez Company is planning to introduce a new product that will sell for $105 per unit. The following manufacturing cost estim. have been made on 20,000 units to be produced the first year $800.000 Direct saterials Direct labor 700,000 (+ $14 per hour x 50,000 hours) Manufacturing overhead costs have not yet been estimated for the new product, but monthly data on total production and over costs for the past 24 months have been analyzed using simple linear regression. The following results were derived from the sim regression and provide the basis for overhead cost estimates for the new product Simple Regression Analysis Results Dependent variable Factory overhead costs Independent variable-Direct laborehours Computed values Intercept Coefficient on Independent variable Coefflclent of correlation. $130.000 0 339 Required: .. w e overhead costs sex ained by the ndependent variable
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