Nova Company's total overhead cost at various levels of activity are presented below:

MonthMachine-

HoursTotal

Overhead

CostApril45,000$165,300May35,000$142,700June55,000$187,900July65,000$210,500

Assume that the total overhead cost above consists of utilities, supervisory salaries, and maintenance. The breakdown of these costs at the 35,000 machine-hour level of activity is:

Utilities (variable)$38,500Supervisory salaries (fixed)50,000Maintenance (mixed)54,200Total overhead cost$142,700

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 $210,500 of overhead cost in July was maintenance cost. ( it may be helpful to first determine how much of the $210,500 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 formY = a + bX.

3. Express the company'stotaloverhead cost in the formY = a + bX.

4. Whattotaloverhead cost would you expect to be incurred at an activity level of 40,000 machine-hours?