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Crosshill Company's total overhead costs at various levels of activity are presented below: Total Overhead Month April May June July Machine-Hours 70,000 60,000 80,000
Crosshill Company's total overhead costs at various levels of activity are presented below: Total Overhead Month April May June July Machine-Hours 70,000 60,000 80,000 90,000 Cost $200,200 $177,300 $223,100 $246,000 * Assume that the overhead cost above consists of utilities, supervisory salaries, and maintenance. The breakdown of these costs at the 60,000-machine-hour level of activity in May is as follows: Utilities (variable) Supervisory salaries (fixed) Maintenance (mixed) Total overhead cost $ 48,000 21,000 108,300 $177,300 The company wants to break down the maintenance cost into its variable and fixed cost elements. Required: 1. Estimate how much of the $246,000 of overhead cost in July was maintenance cost. (Hint: To do this, first betermine how much of the $246,000 consisted of utilities and supervisory salaries. Think about the behaviour of variable and fixed costs within the relevant range.) (Round the "Variable cost per unit" to 2 decimal places.) Maintenance cost in July
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