Nova Companys management wants to break down the maintenance cost into its variable and fixed cost elements.

Required:

1. Estimate how much of the $273,640 of overhead cost in July was maintenance cost. (Hint: to do this, it may be helpful to first determine how much of the $273,640 consisted of utilities and supervisory salaries. Think about the behavior of variable and fixed costs.)

2. Using the high-low method, estimate a cost formula for maintenance in the form Y = a + bX. 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 46,000 machine-hours?