Johnson Corporation is preparing a flexible budget and desires to separate its electricity expense which is semi-variable
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Question:
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
January3, 500P31, 500
February2, 000P20, 000
March4, 000P35, 600
Requirements: Using the least square method
Compute the total manufacturing cost if actual machine hours is 6, 000
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