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Crosshill Company's total overhead costs at various levels of activity are presented below: Month Machine- Hours Total Overhead Cost April 54,000 $198,320 May June
Crosshill Company's total overhead costs at various levels of activity are presented below: Month Machine- Hours Total Overhead Cost April 54,000 $198,320 May June 44,000 $174,520 64,000 $222,120 July 74,000 $245,920 Assume that the overhead cost above consists of utilities, supervisory salaries, and maintenance. The breakdown of these costs at the 44,000-machine-hour level of activity in May is as follows: Utilities (variable) Supervisory salaries (fixed) Maintenance (mixed) Total overhead cost $ 52,800 56,000 65,720 $ 174,520 The company wants to break down the maintenance cost into its variable and fixed cost elements. Required: 1. Estimate how much of the $245,920 of overhead cost in July was maintenance cost. (Hint: To do this, first determine how much of the $245,920 consisted of utilities and supervisory salaries. Think about the behaviour of variable and fixed costs within the relevant range.) (Do not round intermediate calculations.) Maintenance cost in July $ 101,120
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