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 Machine-hours Total factory overhead costs Low 50,000 $14,250,000 High 75,000 $17, 625,000 The factory overhead costs above consist of indirect materials, rent, and maintenance. The company has analyzed these costs at the 50,000 machine-hours level of activity as follows: Indirect materials (variable) Rent (fixed) Maintenance (mixed) $ 5,000,000 6,000,000 3,250,000 Total factory overhead costs $14,250,000 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 $17,625,000 at the high level of activity consists of maintenance cost. (Hint First determine how much of the $17,625,000 cost consists of indirect materials and rent. Think about the behaviour of variable and fixed costs.) (Do not round intermediate calculations.) Maintenance cost 2. Using the high-low method, estimate a cost formula for maintenance. (Round variable cost to 1 decimal place and fixed cost to the nearest dollar amount.) Y = 3. What total overhead costs would you expect the company to incur at an operating level of 70,000 machine-hours? (Do not round intermediate calculations.) Total factory overhead costs