An auditor uses regression analysis to evaluate relationship between utility cost and machine hours. The following information is available based from monthly cost and machine hours of the company:

·       Intercept: 3,000

·       Regression is .90

·       Correlation coefficient is .80

·       SD error 2,000

·       No of observations: 1,000

What is the expected annual utility cost of the company if it has 150 machines, and it will use 5,000 hours for next year?

PROBLEM 2

ABC Corp manufactures several lines of skiing equipment. Its Canada plant makes a single model, the GENOCIDE-25 ski. The following data are available for 2013: Sales is 38,000 units at P 70 per unit; production is 39,000 units; Standard manufacturing variable cost is P 15 per unit;   standard fixed overhead cost is P 25 per unit. The selling and administrative expenses are as follows: Fixed cost totaled P 600,000 and variable cost per unit is P 8.00. ABC Corp use normal activity and budgeted fixed cost of P 2,000,000. Fifty percent of the budgeted fixed cost pertains to manufacturing cost and this is used to set its standard manufacturing fixed cost per unit. There were no beginning inventories.  

What is the adjusted net income under the standard absorption costing?