I. PROBLEM SOLVING (60 points) Solve the following items. Write your answers and complete solutions on a separate journal sheet. 1. La Mia's Casas builds replicas of residences of famous and infamous people. The company is highly automated, and the new accountant-owner has decided to use machine hours as the basis for predicting maintenance costs. The following data are available from the company's most recent eight (8) months of operations: Machine Hours 4,000 7,000 3,500 6,000 Maintenance Costs P1,470 P1,200 | P1,680 | P1,100 3,000 9,000 8,000 5,500 P 880 |P1,960 P1,020 P1,200 a. Using the high-low method, calculate the change in cost compared to the change in activity. (5 points) b. Determine the relationship of cost change to activity change to find the variable cost element. (5 points) c. Compute the total variable cost at both levels of activity. (5 points) d. Determine the fixed cost. (5 points) 2. Uptown Mining has compiled the following data to analyze utility costs: Month January February March April May June July August Machine 200 325 400 410 525 680 820 900 Hours Utility Cost P300 P440 P480 P490 P620 P790 P840 P900 Use the least squares method to develop a formula for budgeting utility cost. a. Compute for the x, y, XX, and x in table format. (36 points) b. Determine the mean of x and y. (4 points) c. Compute for the variable (b) cost and fixed (a) cost. (20 points)