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7. Irma Company manufactures office furniture. During the most productive month of the year, 3,500 desks were manufactured at a total cost of P84,400. In its slowest month, the company made 1,100 desks at a cost of P46,000. Using the high-low method of cost estimation, total fixed costs in August are: a. P56,000 b. P28,400 c. P17,600 d. P38,400 8. In the equation Y = P4,000 + P3X; Y is the cost of workers' compensation insurance and X is direct labor hours. According to this equation, a 100-hour change in total direct labor hours will change the cost of workers compensation insurance by a. P4,000. b. P 300. a. P1,056,000 b. P 846,000 c. P4,300. d. none of the above amounts. 9. Palm, Inc. has a total of 2,000 rooms in its nationwide chain of hotels. On the average, 70 percent of the rooms are occupied each day. The company's operating cost is P21 per occupied room per day at this occupancy level, assuming a 30-day month. This P21 figure contains both variable and fixed cost elements. During October, the occupancy dropped to only 45 percent. A total of P792,000 in operating costs were incurred during the month. What would be the expected operating costs, assuming that the occupancy rate increases to 60 percent during November? c. P 756,000 d. P 829,500

7. Irma Company manufactures office furniture. During the most productive month of the year, 3,500 desks were manufactured at a total cost of P84,400. In its slowest month, the company made 1,100 desks at a cost of P46,000. Using the high-low method of cost estimation, total fixed costs in August are: a. P56,000 b. P28,400 c. P17,600 d. P38,400 8. In the equation Y = P4,000 + P3X; Y is the cost of workers' compensation insurance and X is direct labor hours. According to this equation, a 100-hour change in total direct labor hours will change the cost of workers compensation insurance by a. P4,000. b. P 300. a. P1,056,000 b. P 846,000 c. P4,300. d. none of the above amounts. 9. Palm, Inc. has a total of 2,000 rooms in its nationwide chain of hotels. On the average, 70 percent of the rooms are occupied each day. The company's operating cost is P21 per occupied room per day at this occupancy level, assuming a 30-day month. This P21 figure contains both variable and fixed cost elements. During October, the occupancy dropped to only 45 percent. A total of P792,000 in operating costs were incurred during the month. What would be the expected operating costs, assuming that the occupancy rate increases to 60 percent during November? c. P 756,000 d. P 829,500

Managerial Accounting: The Cornerstone of Business Decision-Making
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter2: Basic Managerial Accounting Concepts
Section: Chapter Questions
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Answer numbers 7-9.
7. Irma Company manufactures office furniture. During the most productive month of the year, 3,500 desks were manufactured at a total cost of P84,400. In its slowest month, the company made 1,100 desks at a cost of P46,000. Using the high-low method of cost estimation, total fixed costs in August are: a. P56,000 b. P28,400 c. P17,600 d. P38,400 8. In the equation Y = P4,000+ P3X; Y is the cost of workers' compensation insurance and X is direct labor hours. According to this equation, a 100-hour change in total direct labor hours will change the cost of workers compensation insurance by a. P4,000. b. P 300. a. P1,056,000 b. P 846,000 c. P4,300. d. none of the above amounts. 9. Palm, Inc. has a total of 2,000 rooms in its nationwide chain of hotels. On the average, 70 percent of the rooms are occupied each day. The company's operating cost is P21 per occupied room per day at this occupancy level, assuming a 30-day month. This P21 figure contains both variable and fixed cost elements. During October, the occupancy dropped to only 45 percent. A total of P792,000 in operating costs were incurred during the month. What would be the expected operating costs, assuming that the occupancy rate increases to 60 percent during November? c. P 756,000 d. P 829,500
Transcribed Image Text:7. Irma Company manufactures office furniture. During the most productive month of the year, 3,500 desks were manufactured at a total cost of P84,400. In its slowest month, the company made 1,100 desks at a cost of P46,000. Using the high-low method of cost estimation, total fixed costs in August are: a. P56,000 b. P28,400 c. P17,600 d. P38,400 8. In the equation Y = P4,000+ P3X; Y is the cost of workers' compensation insurance and X is direct labor hours. According to this equation, a 100-hour change in total direct labor hours will change the cost of workers compensation insurance by a. P4,000. b. P 300. a. P1,056,000 b. P 846,000 c. P4,300. d. none of the above amounts. 9. Palm, Inc. has a total of 2,000 rooms in its nationwide chain of hotels. On the average, 70 percent of the rooms are occupied each day. The company's operating cost is P21 per occupied room per day at this occupancy level, assuming a 30-day month. This P21 figure contains both variable and fixed cost elements. During October, the occupancy dropped to only 45 percent. A total of P792,000 in operating costs were incurred during the month. What would be the expected operating costs, assuming that the occupancy rate increases to 60 percent during November? c. P 756,000 d. P 829,500
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