7. Irma Company manufactures office furniture. During the most productive month of the year, 3,500 desks were manufactured at a total cost of P84,400. In its slowest month, the company made 1,100 desks at a cost of P46,000. Using the high-low method of cost estimation, total fixed costs in August are: a. P56,000 b. P28,400 c. P17,600 d. P38,400 8. In the equation Y = P4,000 + P3X; Y is the cost of workers' compensation insurance and X is direct labor hours. According to this equation, a 100-hour change in total direct labor hours will change the cost of workers compensation insurance by a. P4,000. b. P 300. a. P1,056,000 b. P 846,000 c. P4,300. d. none of the above amounts. 9. Palm, Inc. has a total of 2,000 rooms in its nationwide chain of hotels. On the average, 70 percent of the rooms are occupied each day. The company's operating cost is P21 per occupied room per day at this occupancy level, assuming a 30-day month. This P21 figure contains both variable and fixed cost elements. During October, the occupancy dropped to only 45 percent. A total of P792,000 in operating costs were incurred during the month. What would be the expected operating costs, assuming that the occupancy rate increases to 60 percent during November? c. P 756,000 d. P 829,500
7. Irma Company manufactures office furniture. During the most productive month of the year, 3,500 desks were manufactured at a total cost of P84,400. In its slowest month, the company made 1,100 desks at a cost of P46,000. Using the high-low method of cost estimation, total fixed costs in August are: a. P56,000 b. P28,400 c. P17,600 d. P38,400 8. In the equation Y = P4,000 + P3X; Y is the cost of workers' compensation insurance and X is direct labor hours. According to this equation, a 100-hour change in total direct labor hours will change the cost of workers compensation insurance by a. P4,000. b. P 300. a. P1,056,000 b. P 846,000 c. P4,300. d. none of the above amounts. 9. Palm, Inc. has a total of 2,000 rooms in its nationwide chain of hotels. On the average, 70 percent of the rooms are occupied each day. The company's operating cost is P21 per occupied room per day at this occupancy level, assuming a 30-day month. This P21 figure contains both variable and fixed cost elements. During October, the occupancy dropped to only 45 percent. A total of P792,000 in operating costs were incurred during the month. What would be the expected operating costs, assuming that the occupancy rate increases to 60 percent during November? c. P 756,000 d. P 829,500
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Answer numbers 7-9.
Transcribed Image Text:7. Irma Company manufactures office furniture. During the most productive month of the year, 3,500
desks were manufactured at a total cost of P84,400. In its slowest month, the company made 1,100
desks at a cost of P46,000. Using the high-low method of cost estimation, total fixed costs in August
are:
a. P56,000
b. P28,400
c. P17,600
d. P38,400
8. In the equation Y = P4,000+ P3X; Y is the cost of workers' compensation insurance and X is direct
labor hours. According to this equation, a 100-hour change in total direct labor hours will change the
cost of workers compensation insurance by
a. P4,000.
b. P 300.
a. P1,056,000
b. P 846,000
c. P4,300.
d. none of the above amounts.
9. Palm, Inc. has a total of 2,000 rooms in its nationwide chain of hotels. On the average, 70 percent
of the rooms are occupied each day. The company's operating cost is P21 per occupied room per day
at this occupancy level, assuming a 30-day month. This P21 figure contains both variable and fixed
cost elements. During October, the occupancy dropped to only 45 percent. A total of P792,000 in
operating costs were incurred during the month.
What would be the expected operating costs, assuming that the occupancy rate increases to 60
percent during November?
c. P 756,000
d. P 829,500
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