46.(6 MARKS) Nunavut Company operates a chain of cozy coffee shops. The company's chief executive officer is interested in accumulating some information on the manufacturing overhead costs incurred by the company. You have been asked to analyze the following six months' worth of data.

Month

Manufacturing Overhead cost

No. of

Labour Hours

January

$60,160

867

February

56,500

624

March

58,900

689

April

63,500

974

May

59,325

730

June

62,400

901

Required:

A. Using the high low method, construct a cost formula for the total manufacturing overhead cost.

B. The CEO would like to limit total manufacturing overhead cost in future months to 20% of total revenues. Will that be possible if total revenues are expected to average $300,000 per month and total labour hours per month are expected to average 1,000? Show all of your calculations.

C. Calculate the estimated total cost of manufacturing overhead assuming 1,000 labour hours are incurred in a given month.