Question
Benavides Corp. is preparing a flexible budget and desires to separate its electricity expense which is semi-variable and fluctuates with total machine hours, into its
Benavides Corp. is preparing a flexible budget and desires to separate its electricity expense which is semi-variable and fluctuates with total machine hours, into its fixed and variable components. Information for the first three months of 2013 is as follows:
Machine hours Electricity Expense
January 5, 000 P37, 800
February 4, 000 P34, 200
March 6, 500 P39, 600
Requirements: Using the least square method (use 4 decimal places for the variable rate and two decimal places for total costs)
1. Compute the variable rate per machine hour (4 decimal places)
2. Compute the total manufacturing cost if actual machine hours is 10, 000 (two decimal places)
3. Compute the fixed portion of Benavides's electricity expense (two decimal places)
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