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Crosshill Companys total overhead costs at various levels of activity are presented below: Month Machine-Hours Total Overhead Cost April 49,000 $173,870 May 39,000 $151,570 June

Crosshill Companys total overhead costs at various levels of activity are presented below:

Month Machine-Hours Total Overhead Cost
April 49,000 $173,870
May 39,000 $151,570
June 59,000 $196,170
July 69,000 $218,470

Assume that the overhead cost above consists of utilities, supervisory salaries, and maintenance. The breakdown of these costs at the 39,000-machine-hour level of activity in May is as follows:

Utilities (variable) $ 42,900
Supervisory salaries (fixed) 46,000
Maintenance (mixed) 62,670
Total overhead cost $ 151,570

The company wants to break down the maintenance cost into its variable and fixed cost elements.

Required:

1. Estimate how much of the $218,470 of overhead cost in July was maintenance cost. (Hint: To do this, first determine how much of the $218,470 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 of July

2. Using the highlow 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
Variable cost element per MH
Fixed cost element

Y = + X

3. Express the companys 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

4. What total overhead cost would you expect to be incurred at an activity level of 44,000 machine-hours? (Do not round intermediate calculations.)

Total overhead cost

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