Reference no: EM133121813
Question 1 - The Rodelio Co. has the following information available regarding costs and revenues for two recent months. Selling price is P20.
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March
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April
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Sales revenue
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P60,000
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P100,000
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Cost of goods sold
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-36,000
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- 60,000
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Gross profit
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P24,000
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P40,000
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Other expenses:
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Advertising
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P600
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P600
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Utilities
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4,200
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5,600
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Salaries and commissions
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3,200
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4,000
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Supplies (bags, cleaning supplies etc.)
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320
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400
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Depreciation
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2,300
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2,300
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Administrative costs
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1,900
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1,900
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Total
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-12,520
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-14,800
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Net income
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P11,480
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P25,200
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Required -
1. Identify each of the company's expenses (including cost of goods sold) as being variable, fixed, or mixed.
2. By use of the high-low method, separate each mixed expense into variable and fixed elements. State the cost formula for each mixed expense.
3. What is the total cost equation?
4. Estimate the total cost, if sales amount to P75,000?
Question 2 - Apolinario Company owns two luxury automobiles that are used by employees on company business. Mileage and expenses, excluding depreciation, by quarters for the most recent year are presented below:
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Quarter
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Mileage
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Expenses
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First
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3,000
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P550
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Second
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3,500
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560
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Third
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2,000
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450
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Fourth
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3,500
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600
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12,000
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P2,160
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Required - Determine the variable cost per mile (nearest tenth of a cent) and the fixed costs per quarter, using the method of least squares.
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