3. What total overhead costs would you expect the company to incur at an operating level of 68,000 machine hours?

Colby Limited is a manufacturing company whose total factory overhead costs fluctuate somewhat from year to year, according to the number of machine-hours worked in its production facility. These costs at high and low levels of activity over recent years are given below: Level of Activity Low High Machine-hours Total factory overhead costs 63, 000 83, 000 $38, 749, 000 $42, 709, 000 The factory overhead costs above consist of indirect materials, rent, and maintenance. The company has analyzed these costs at the 63,000 machine-hours level of activity as follows: Indirect materials (variable) $9, 702, 000 Rent (fixed) Maintenance (mixed) 21, 300, 000 7, 747, 000 Total factory overhead costs $38, 749, 000 For planning purposes, the company wants to break down the maintenance cost into its variable and fixed cost elements. Required: 1. Estimate how much of the factory overhead cost of $42,709,000 at the high level of activity consists of maintenance cost. Maintenance cost 2. Using the high-low method, estimate a cost formula for maintenance. Y = + X