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Nova Company's total overhead cost at various levels of activity are presented below Total Overhead Machine- Month Hours Cost $ 169,310 $ 146,010 $ 192,610
Nova Company's total overhead cost at various levels of activity are presented below Total Overhead Machine- Month Hours Cost $ 169,310 $ 146,010 $ 192,610 $ 215,910 April May 47,000 37,000 57,000 67,000 June July Assume that the total overhead cost above consists of util ities, supervisory salaries, and maintenance. The breakdown of these costs at the 37,000 machine-hour level of activity is: $ 40,700 46,000 Utilities (variable) Supervisory salaries Maintenance (mixed) 59,310 $146,010 Total overhead cost Nova Company's management wants to break down the maintenance cost into its variable and fixed cost elements Required: 1. Estimate how much of the $215,910 of overhead cost in July was maintenance cost. (Hint: to do this, it may be helpful to first determine how much of the $215,910 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 company's 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? Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required 3 Required 1 Required 2 Required 4 Using the high-low method, estimate a cost formula for maintenance in the form Y = a bx. (Do not round your intermediate calculations. Round the "Variable cost per unit" to 2 decimal places.) ormula ror ma $ 2.33 X Y = 59,800 Express the company's total overhead cost in the form Y = abX. (Do not round your intermediate calculations. Round the "Variable cost per unit" to 2 decimal places.) Variable Cost per Machine- Fixed Cost Hour 1.10 S Utilities cost 0 Supervisory salaries cost $ 46,000 Maintenance cost 59,800 2.33 Total overhead cost $ 3.43 105,800 Y = 105,800x 3.43 X Required 2 Required 4 Answer is complete but not entirely correct Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 What total overhead cost would you expect to be incurred at an activity level of 42,000 machine-hours? (Do not round intermediate calculations.) Total overhead costs 249,860 Required 3 Required 4
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