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Jeff Merchandisers (JM) has determined with 100 percent certainty the following costs for making one unit of its only product: Direct materials Direct labour $6.00
Jeff Merchandisers (JM) has determined with 100 percent certainty the following costs for making one unit of its only product: Direct materials Direct labour $6.00 14.00 $10.00 The company is, however, not sure of the behaviour of its total indirect manufacturing costs (that is, manufacturing overhead). The controller therefore ran a simple regression based on 20 pairs of monthly observations and obtained the following results: Y = $6,000 + 1.50x Y represents total monthly manufacturing overhead costs while X represents total monthly manufacturing direct labour costs. Required: Assume JM incurs NO selling and administrative expenses. What is your best estimate of the company's monthly breakeven sales in units at a guaranteed selling price of $20.00 per unit
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