Reference no: EM132629086

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:

Problem 1: Using the least square method (Round off equation multiplier to two decimal places). Compute the variable rate per machine hour (round off to two decimal places)