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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

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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 its production facility. These costs at high and low levels of activity over recent years are given below: Level of Activity LOW High Machine-hours 82,700 92,700 Total factory overhead costs $44,626,900 $47,096,900 The factory overhead costs above consist of indirect materials, rent, and maintenance. The company has analyzed these costs at the 82,700 machine-hours level of activity as follows: Indirect materials (variable) Rent (fixed) $13,645,500 20,000,000 Check my work Indirect materials (variable) Rent (fixed) Maintenance (mixed) Total factory overhead costs $13,645,500 20,000,000 10,981,400 $44,626,900 For planning purposes, the company wants to break down the maintenance cost into its variable and fixed cost elements. Required: 1. Estimate how much of the factory overhead cost of $47096,900 at the high level of activity consists of maintenance cost Mair nance cost 2. Using the high-low method, estimate a cost formula for maintenance. d 3. What total overhead costs would you expect the company to incur at an operating level of 87,700 machine-hours? Total factory overhead costs

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