Reference no: EM132855149

Johnson Corporation is preparing a flexible budget and desires to separate its electricity expense which is semi-variable and fluctuates with total machine hours, into its fixed and variable components. Information for the first three months of 2013 is as follows:

Machine hours Electricity Expense

January 3, 500 P31, 500

February 2, 000 P20, 000

March 4, 000 P35, 600

Requirements: Using the least square method,

1. Compute the variable rate per machine hour

2. Compute the fixed portion of Johnson's electricity expense

3. Compute the total manufacturing cost if actual machine hours is 6, 000