Answered: AA Co. is preparing a flexible budget…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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19. AA Co. is preparing a flexible budget for the next year and requires a breakdown of the factory maintenance cost into fixed and variable elements. Because they are having a hard time analyzing its behavior. The maintenance costs and machine hours (the selected cost driver) for the past six months are as follows:

20.Based on the data of AA Co. What is the average annual fixed maintenance cost amounts to

Maintenance Costs
Machine Hours
January
February
P15,500
10,720
1,800
1,230
Maintenance Costs
Machine Hours
15,100
15,840
14,800
10,600
1,740
2,190
1,602
1,590
March
April
May
June
If Nanlalameg Co. įses the high-low method of analysis, the estimated variable rate of
maintenance cost per machine hour is

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