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Crosshill Company's total overhead costs at various levels of activity are presented below: Month April May June July Total Overhead Machine-Hours Cost 51,080 $175,750 41,800
Crosshill Company's total overhead costs at various levels of activity are presented below: Month April May June July Total Overhead Machine-Hours Cost 51,080 $175,750 41,800 $152, 250 61,080 $199,25e 71,080 $222.750 Assume that the overhead cost above consists of utilities, supervisory salaries, and maintenance. The breakdown of these costs at the 41,000-machine-hour level of activity in May is as follows: $ Utilities (variable) Supervisory salaries (fixed) Maintenance (mixed) () Total overhead cost 49,280 41,880 62,85e $ 152, 25e The company wants to break down the maintenance cost into its variable and fixed cost elements. Required: 1. Estimate how much of the $222.750 of overhead cost in July was maintenance cost. (Hint: To do this first determine how much of the $222,750 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 2 Using the high-low method, estimate a cost formula for maintenance. (Do not round your Intermediate calculations. Round the "Variable cost per unit" to 2 decimal places.) Machine- Hours Maintenance Cost High activity level Low activity level Change 0 $ 0 per MH Variable cost element Fixed cost element Y = 3. Express the company's total overhead cost in the form Y = a +bX. (Do not round your intermediate calculations. Round the "Variable cost per unit" to 2 decimal places.) Variable Cost per Machine-Hour Fixed Cost Utilities cost Supervisory salaries cost Maintenance cost Total overhead cost $ 0.00 $ 0 4. What total overhead cost would you expect to be incurred at an activity level of 46,000 machine-hours? (Do not round intermediate calculations.) Total overhead cost
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