Asper Company has recently introduced budgeting as an integral part of its corporate planning process. An inexperienced member of the accounting staff was given the assignment of constructing a flexible budget for manufacturing overhead costs and prepared it in the format that follows Percentage of Capacity 80% 100% Machine-hours 55,200 69,000 Utilities Supplies Indirect labour Maintenance Supervision $ 49,160 5,520 11,040 44,080 29,000 $ 60,200 6,900 13,800 49,600 29,000 Total manufacturing overhead cost $ 138,800 $ 159,500 The company assigns manufacturing overhead costs to production on the basis of standard machine-hours. The cost formulas used to prepare the budgeted figures above are relevant over a range of 80% to 100% of capacity in a month. The managers who will be working under these budgets have control over both fixed and variable manufacturing overhead costs 1. Use the high-low method to separate fixed and variable costs. (Round variable cost answers to 2 decimal places Variable Fixed Component Overhead IemComponent Utilities Supplies Indirect labour Maintenance Supervisiorn Totals 0.00 2. Come up with a single cost formula for all overhead costs based on your analysis in requirement 1 above. (Hint. Your cost formula should be of the form:y a+ bx.) (Round variable cost answer to 2 decimal places.) 3. During May, the company operated at 86% of machine-hour capacity. Actual manufacturing overhead costs incurred during the month were as follows: Utilities Supplies Indirect labour Maintenance Supervision $50,700 7,970 12,930 41,890 29,000 Total actual manufacturing overhead cost $142,490 Fixed costs had no budget variances. Prepare an overhead performance report for May. Include both fixed and variable costs in your report (in separate sections). Structure your report so that it shows only a spending variance for variable overhead. The company originally budgeted to work 55,200 machine-hours during the month, standard hours allowed for the month's production totalled 56,200 machine-hours. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Round "Cost Formula per MH" answers to 2 decimal places.) Flexible Cost Formula per MH Overhead Costs 59,340 MH Budget 59,340 MH MHSpending Variance Variable overhead costs Total variable overhead cost$ 0.00 Fixed overhead costs Total fixed overhead cost