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Colby Limited is a manufacturing company whose total factory overhead costs fluctuate somewhat from year to year, according to the number of machine-hours worked in

Colby Limited is a manufacturing company whose total factory overhead costs fluctuate somewhat from year to year, according to the number of machine-hours worked in its production facility. These costs at high and low levels of activity over recent years are given below:

Level of ActivityLowHighMachine-hours61,50081,500Total factory overhead costs$34,589,500$39,049,500

The factory overhead costs above consist of indirect materials, rent, and maintenance. The company has analyzed these costs at the 61,500 machine-hours level of activity as follows:

Indirect materials (variable)$9,102,000Rent (fixed)17,200,000Maintenance (mixed)8,287,500Total factory overhead costs$34,589,500

For planning purposes, the company wants to break down the maintenance cost into its variable and fixed cost elements.

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