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		82,000			92,000
Total factory overhead costs	$	35,230,000		$	37,380,000

The factory overhead costs above consist of indirect materials, rent, and maintenance. The company has analyzed these costs at the 82,000 machine-hours level of activity as follows:

Indirect materials (variable)	$	12,546,000
Rent (fixed)		13,600,000
Maintenance (mixed)		9,084,000
Total factory overhead costs	$	35,230,000

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 $37,380,000 at the high level of activity consists of maintenance cost.

2. Using the highlow method, estimate a cost formula for maintenance.

3. What total overhead costs would you expect the company to incur at an operating level of 87,000 machine-hours?