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REQUIRED: 1. Use the high-low method to estimate the company's energy cost behavior and express it in equation form. 2. Predict the energy cost for a month in which 78,000 kilos of banana chips are produced.

REQUIRED: 1. Use the high-low method to estimate the company's energy cost behavior and express it in equation form. 2. Predict the energy cost for a month in which 78,000 kilos of banana chips are produced.

FINANCIAL ACCOUNTING
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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Answer only Activity 2. Thanks

(Cost accounting)

4G 4G 08:44 NE 39 3 - Activity.Cos. Activities Activity 1 Ang-bang Co., doing business in the province of La Union, reports the following total costs at two levels of production: Cost Item Direct labor Indirect labor 2,000 units P 12,000 4,000 20,000 7,000 24,000 8,000 16,000 5,000 units P 30,000 15,000 20,000 16,000 24,000 19,000 40,000 Classification Property taxes Maintenance Depreciation Utilities Direct materials REQUIRED: Classify each cost as variable, fixed, or mixed. Activity 2 Jimmy P. is a highly successful farmer who has formed his own company to produce and package banana chips. The recently hired controller for the firm is about to apply the high- low method in estimating the company's energy cost behavior. The following costs were incurred during the past 12 months: Kilos of Banana Chips Produced 105.000 63,000 66,000 72,000 Energy Costs P70,200 66,300 66,000 67,350 Month January February March April 90,000 96,000 2,000 90,000 90,000 84,000 123,000 117,000 May June July August September October November 68,700 70,050 12,500 68.400 69,000 68,100 72,300 74,850 December REQUIRED: 1. Use the high-low method to estimate the company's energy cost behavior and express it in equation form. 2. Predict the energy cost for a month in which 78,000 kilos of banana chips are produced. Activity 3 Mighty Muffler, Inc. operates an automobile service facility that specializes in replacing mufflers on compact cars. The following table shows the costs incurred during a month when 700 mufflers were replaced. Muffler replacements Total costs: 600 700 800 Fixed costs Variable costs Total costs P56,000 28,000 P84.000 a Cost per muffler replacement: Fixed cost Variable cost Total cost per muffler replacement h k m Required: a. Fill in the missing amounts, labeled (a) through ( o), in the table. b. Compute income, assuming that the service fee per muffler replacement is P120, and that the company made 730 muffler replacements during the period. 1 | Page II
Transcribed Image Text:4G 4G 08:44 NE 39 3 - Activity.Cos. Activities Activity 1 Ang-bang Co., doing business in the province of La Union, reports the following total costs at two levels of production: Cost Item Direct labor Indirect labor 2,000 units P 12,000 4,000 20,000 7,000 24,000 8,000 16,000 5,000 units P 30,000 15,000 20,000 16,000 24,000 19,000 40,000 Classification Property taxes Maintenance Depreciation Utilities Direct materials REQUIRED: Classify each cost as variable, fixed, or mixed. Activity 2 Jimmy P. is a highly successful farmer who has formed his own company to produce and package banana chips. The recently hired controller for the firm is about to apply the high- low method in estimating the company's energy cost behavior. The following costs were incurred during the past 12 months: Kilos of Banana Chips Produced 105.000 63,000 66,000 72,000 Energy Costs P70,200 66,300 66,000 67,350 Month January February March April 90,000 96,000 2,000 90,000 90,000 84,000 123,000 117,000 May June July August September October November 68,700 70,050 12,500 68.400 69,000 68,100 72,300 74,850 December REQUIRED: 1. Use the high-low method to estimate the company's energy cost behavior and express it in equation form. 2. Predict the energy cost for a month in which 78,000 kilos of banana chips are produced. Activity 3 Mighty Muffler, Inc. operates an automobile service facility that specializes in replacing mufflers on compact cars. The following table shows the costs incurred during a month when 700 mufflers were replaced. Muffler replacements Total costs: 600 700 800 Fixed costs Variable costs Total costs P56,000 28,000 P84.000 a Cost per muffler replacement: Fixed cost Variable cost Total cost per muffler replacement h k m Required: a. Fill in the missing amounts, labeled (a) through ( o), in the table. b. Compute income, assuming that the service fee per muffler replacement is P120, and that the company made 730 muffler replacements during the period. 1 | Page II
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