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

Month	Machine-Hours	Total Overhead Cost
April	49,000	$ 197,720
May	39,000	$ 171,920
June	59,000	$ 223,520
July	69,000	$ 249,320

Assume that the total overhead cost above consists of utilities, supervisory salaries, and maintenance. The breakdown of these costs at the 39,000 machine-hour level of activity is:

Utilities (variable)	$ 58,500
Supervisory salaries (fixed)	56,000
Maintenance (mixed)	57,420
Total overhead cost	$ 171,920

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

Required:

1. Estimate how much of the $249,320 of overhead cost in July was maintenance cost. (Hint: to do this, it may be helpful to first determine how much of the $249,320 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 44,000 machine-hours?