Question
Crosshill Company's total overhead costs at various levels of activity are presented below: MonthMachine-HoursTotal Overhead CostApril73,000$141,000May63,000$159,000June83,000$333,000July93,000$211,000 Assume that the overhead cost above consists of utilities,
Crosshill Company's total overhead costs at various levels of activity are presented below:
MonthMachine-HoursTotal Overhead CostApril73,000$141,000May63,000$159,000June83,000$333,000July93,000$211,000
Assume that the overhead cost above consists of utilities, supervisory salaries, and maintenance. The breakdown of these costs at the 63,000-machine-hour level of activity in May is as follows:
Utilities (variable)$33,000Supervisory salaries (fixed)21,000Maintenance (mixed)105,000Total overhead cost$159,000
The company wants to break down the maintenance cost into its variable and fixed cost elements.
2.Using the high-low method, estimate a cost formula for maintenance.(Round the "Variable cost per unit" to 2 decimal places.)
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