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Coby Limined is a manufacturing company whose total factory overthead costs fuctuate somewhat from year to year, according to the number of machne-hours worked in
Coby Limined is a manufacturing company whose total factory overthead costs fuctuate somewhat from year to year, according to the number of machne-hours worked in tis producton foclity. These costs at high and low levels of activty ower recent years are ghen below: The factory overhead costs above consist of ndirect moterials, rene, and maintenance. The company has analyzed these costs at the 82700 machine hours level of octivity as follows For planning purposes. the company wants to break down the moinsenance cost into its vanable and flxed cost elements: Requiled: 1. Estimote how much of the factory overhead cost of $47,095,900 at the high level of activity constists of maintenance cost. 2. Using the high-low method, estimate a cost formula for maintenance 3. What tora/ overhead costs would you expect the company to incur at an operating level of 87,700 machine-hours
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