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Help me please. Nova Companys total overhead cost at various levels of activity are presented below: Month Machine-Hours Total Overhead Cost April 70,000 $198,000 May
Help me please.
Nova Companys total overhead cost at various levels of activity are presented below: |
Month | Machine-Hours | Total Overhead Cost |
April | 70,000 | $198,000 |
May | 60,000 | $174,000 |
June | 80,000 | $222,000 |
July | 90,000 | $246,000 |
Assume that the total overhead cost above consists of utilities, supervisory salaries, and maintenance. The breakdown of these costs at the 60,000 machine-hour level of activity is: |
Utilities (variable) | $ | 48,000 |
Supervisory salaries (fixed) | 21,000 | |
Maintenance (mixed) | 105,000 | |
Total overhead cost | $ | 174,000 |
Nova Companys management wants to break down the maintenance cost into its variable and fixed cost elements.
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