4. Nova Companys total overhead cost at various levels of activity are presented below:

Month Machine hours Total O/H cost April 70,000 $205,000 May 60,000 $174,000 June 80,000 $235,000 July 90,000 $255.000

Assume that the total overhead cost above consists of utilities, supervisory salaries, and maintenance. The breakdown of these May months costs at the 60,000 machine-hour level of activity is: Utilities (variable) . . . . . . . . . . . $ 42,000 Supervisory salaries (fixed) . . . $ 27,000 Maintenance (mixed) . . . . . . . . $ 105,000 Total overhead cost . . . . . . . . . $ 174,000 1. Estimate how much of the $255,000 of overhead cost in July was maintenance cost. (5 marks) 2. Using the high-low method, estimate a cost formula for maintenance, and identify the maintenance cost for 120,000 machine hours (5 marks)