a. Use the highlow method to determine: MachineHours Manned-mu- Overhead $32 l 14, l. The variable element of manufacturing overhead costs per machinehour. $140,000 3,500 _ $40 2. The xed element of monthly overhead cost. Fixed cost = Total cost Variable cost = $320,000 ($40 X 5000] = $320,000 $240J000 = $80,000 h. Bursa expects machinehours in May to equal 4,5 00. Use the cost relationships determined in part a to forecast May's manufacturing overhead costs. Fixed cost = Total cost Variable cost $00000 = Total cost ($40 X 13500] $00000 = Total cost $180,000 Total cost = $260,000 c. Suppose Bursa had used the cost relationship determined in part a to estimate the total manufacturing overhead expected for the months of February and March. By what amount would Bursa have over- or underestimated these costs? Fixed cost = Total cost - Variable cost $80,000 = Total cost - ($40 x 3,200) $80,000 = Total cost - $128,000 Total cost = $208,000 February = $224,000 - $208,000 = $16,000 Bursa would have overestimated these costs for February by $16,000. Fixed cost = Total cost - Variable cost $80,000 = Total cost - ($40 x 4,900) $80,000 = Total cost - $196,000 Total cost = $276,000 March = $264,000 - $276,000 = -$12,000 Bursa would have underestimated these costs for March by $12,000.