Nova Companys total overhead cost at various levels of activity are presented below:

Month	Machine- Hours			Total Overhead Cost
April		47,000		$	177,020
May		37,000		$	153,420
June		57,000		$	200,620
July		67,000		$	224,220

Assume that the total overhead cost above consists of utilities, supervisory salaries, and maintenance. The breakdown of these costs at the 37,000 machine-hour level of activity is:

Utilities (variable)	$	44,400
Supervisory salaries (fixed)		51,000
Maintenance (mixed)		58,020
Total overhead cost	$	153,420

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

Required:

1. Estimate how much of the $224,220 of overhead cost in July was maintenance cost. (Hint: to do this, it may be helpful to first determine how much of the $224,220 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 42,000 machine-hours?