HighLow Method; Predicting Cost Prince Companys total overhead costs at various levels of activity are presented below: labour overhead Month Hours Cost September . . . . . . . . . . . . . . . . . . 100,000 $388,000 October . . . . . . . . . . . . . . . . . . . . . 80,000 $340,400 November . . . . . . . . . . . . . . . . . . . 135,000 $485,600 December . . . . . . . . . . . . . . . . . . . 140,000 $483,200 Assume that the overhead cost above consists of utilities, supervisory salaries, depreciation, and maintenance. The breakdown of these costs at the 80,000-machine-hour level of activity in October is as follows: Utilities (variable) . . . . . . . . . . . . . . . . . . . . . . . . . . . $104,000 Supervisory salaries and depreciation (fixed). . . . . . . . . . . . . . . . . . 120,000 Maintenance (mixed) . . . . . . . . . . . . . . . . . . . . . . . 116,400 Total overhead cost . . . . . . . . . . . . . . . . . . . . . . . . . $340,400 The company wants to break down the maintenance cost into its variable and fixed cost elements. Required: 1. Estimate how much of the $483,200 of overhead cost in December was maintenance cost. ( Hint : To do this, first determine how much of the $483,200 consisted of utilities and supervisory salaries. Think about the behaviour of variable and fixed costs within the relevant range.) 2. Using the highlow method, estimate a cost formula for maintenance. 3. Express the companys total overhead cost in the form Y = a + bX . 4. What total overhead cost would you expect to be incurred at an activity level of 90,000 machine-hours?