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Problem solving Problem 1 Rosanna Di Magiba Ltd recorded the following costs for the past six months: Using High-Low Method and Least Square Method. Month

Problem solving

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Problem 1 Rosanna Di Magiba Ltd recorded the following costs for the past six months: Using High-Low Method and Least Square Method. Month Activity level Total cost Units (000) K'000 40 6,586 2 30 5,826 3 36 6,282 4 38 6,396 5 42 6,700 33 6,052 Required: 1. Estimate the fixed cost per month 2. Estimate the total costs for the following activity levels in a monthProblem 2 Meng Company is preparing a flexible budget for the next year and requires a breakdown of the factory maintenance cost into the fixed and variable elements. The maintenance costs and machine hours (the selected cost driver) for the past six months are as follows: Maintenance Costs Machine Hours January P15,500 1,800 February 10,720 1,230 March 15,100 1,740 April 15,840 2,190 May 14.800 1,602 June 10,600 1,590 Required: Compute the following: 1. Estimated variable rate 2. Annual Fixed CostsProblem 3 Belle Company produces and sells rattan baskets. The number of units produced and the corresponding total production costs for six months, which are representatives for the year, are as follows: Months Units Produced Production Costs April 500 P4,000 May 700 8,000 June 900 6,000 July 600 7,500 August 800 8,500 September 550 7,250 Based on the given information and using least square method of computation, select the best answer for each question, where: Y= total monthly production costs X= number of units produced per month a= fixed production cost per moth b= variable production cost per month n= number of months Z =summation Required: Compute the following: 1. Variable cost per unit 2. Monthly Fixed Cost per unit 3. Cost FunctionProblem 4 Johnson Corporation 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 2009 is as follows: Machine hours Electricity Expense January 3,500 P31,500 February 2,000 20,000 March 4,000 35,600 Requirements: 1. Compute the variable rate per machine hour. 2. Compute the fixed portion of Johnson's electricity expense. 3. Compute the total manufacturing costs if Johnson's actual machine hours are 4,500

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