Problem 1

ABC Company provided you the following costs pertaining to Product Babadji:

Month January February

Units production 35,000 40,000
Costs:
Electricity P61,250 P72,000
Labor P175,000 P200,000
Materials P26,250 P30,000
Rental Fee P100,000 P100,000
Transportation P58,450 P75,600

Required:

1. From the costs incurred for the production of Product Babadji, which is variable, fixed and semi-
variable.

Problem 2

The following information pertains to the cost of maintenance for the product:

Month Maintenance Cost Machine Hours

August P29,000 23,500
September P26,020 21,000
October P24,600 18,500
November P22,300 15,000
December P25,100 19,000

Using the high-low method, what is total maintenance cost for the month of January 2024 assuming
27,000 machine hours were incurred.

Problem 2

Month Meals served Utilities Cost

December 55 P401.00
January 30 P360.00
February 25 P347.50
March 40 P385.50
April 60 P414.00

Other costs in relation for each meal served are as follows:

Direct Materials P4.00 per meal

Direct Labor P2.50 per meal
Rental costs of the production area per month P340.00

Required:

1. Using the least-square method, what is the variable rate and fixed cost per month for utilities costs.
2. Assuming the company’s meals served for the year 2024 is 12,500, how much is the total production
costs?