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Fernicus Company gathered the following information on powercosts and factory machine usage for the...

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Accounting

Fernicus Company gathered the following information on powercosts and factory machine usage for the last five months.
Month
Power Cost
Factory Machine Hours
January
P48,000
19,000
February
35,000
15,500
March
50,000
18,500
April
41,000
17,000
May
40,000
15,000
Instructions: Use the high-low method of analyzing costs to answerthe following questions.
1. How much is the estimated variable portion of power costs perfactory machine hour?
2. How much is the estimated fixed power cost each month?
3. If it is estimated that 18,000 factory machine hours will be runin June, what is the expected total power costs for June?

Answer & Explanation Solved by verified expert
3.6 Ratings (305 Votes)
All working forms part of the answer Working Month Machine hours Cost Jan 19000 4800000 Feb 15500 3500000 Mar 18500 5000000 Apr 17000 4100000 May 15000 4000000 5    See Answer
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Transcribed Image Text

In: AccountingFernicus Company gathered the following information on powercosts and factory machine usage for the last...Fernicus Company gathered the following information on powercosts and factory machine usage for the last five months.MonthPower CostFactory Machine HoursJanuaryP48,00019,000February35,00015,500March50,00018,500April41,00017,000May40,00015,000Instructions: Use the high-low method of analyzing costs to answerthe following questions.1. How much is the estimated variable portion of power costs perfactory machine hour?2. How much is the estimated fixed power cost each month?3. If it is estimated that 18,000 factory machine hours will be runin June, what is the expected total power costs for June?

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