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Nova Company s total overhead cost at various levels of activity are presented below: Month Machine - Hours Total Overhead Cost April 5 3 ,

Nova Companys total overhead cost at various levels of activity are presented below:
Month Machine-Hours Total Overhead Cost
April 53,000 $ 205,830
May 43,000 $ 181,730
June 63,000 $ 229,930
July 73,000 $ 254,030
Assume the total overhead cost above consists of utilities, supervisory salaries, and maintenance. The breakdown of these costs at the 43,000 machine-hour level of activity is:
Utilities (variable) $ 51,600
Supervisory salaries (fixed)65,000
Maintenance (mixed)65,130
Total overhead cost $ 181,730
Nova Companys management wants to break down the maintenance cost into its variable and fixed cost elements.
Required:
Estimate how much of the $254,030 of overhead cost in July was maintenance cost. (Hint: To do this, it may be helpful to first determine how much of the $254,030 consisted of utilities and supervisory salaries. Think about the behavior of variable and fixed costs.)
Using the high-low method, estimate a cost formula for maintenance in the form Y = a + bX.
Express the companys total overhead cost in the form Y = a + bX.
Estimate how much of the $254,030 of overhead cost in July was maintenance cost. (Hint: to do this, it may be helpful to first determine how much of the $254,030 consisted of utilities and supervisory salaries. Think about the behavior of variable and fixed costs.)

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