5-17 High-Low Method; Predicting Cost [LO1, LO3] Nova Company's total overhead cost at various levels of activity are presented below: Month Machine- Hours Total Overhead Cost April 53,750 $ 197,175 May 43,000 $ 173,740 June 64,500 $ 220,610 July 75,250 $ 244,045 ________________________________________ Assume that the total overhead cost above consists of utilities, supervisory salaries, and maintenance. The breakdown of these costs at the 43,000 machine-hour level of activity is: Utilities (variable) $ 47,300 Supervisory salaries (fixed) 65,000 Maintenance (mixed) 61,440 Total overhead cost $ 173,740 ________________________________________ Nova Company's management wants to break down the maintenance cost into its variable and fixed cost elements. Requirement 1: Estimate how much of the $244,045 of overhead cost in July was maintenance cost. (Hint: to do this, it may be helpful to first determine how much of the $244,045 consisted of utilities and supervisory salaries. Think about the behavior of variable and fixed costs!) (Omit the "$" sign in your response.) Maintenance cost $ Requirement 2: Using the high-low method, estimate a cost formula for maintenance. (Round your fixed portion to the nearest dollar amount and variable portion of the formula to 2 decimal places. Omit the "$" sign in your response.) Y = $ + $ X Requirement 3: Express the company's total overhead cost in the form Y = a +bX. (Round your fixed portion to the nearest dollar amount and variable portion of the formula to 2 decimal places. Omit the "$" sign in your response.) Y = $ + $ X Requirement 4: What total overhead cost would you expect to be incurred at an operating activity level of 47,300 machine-hours? (Round your answer to the nearest dollar amount. Omit the "$" sign in your response.) Total overhead costs $