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Nova Company's total overhead cost at various levels of activity are presented below: Month April Total Overhead Cost $ 213, eee $ 188,000 $ 238,eee
Nova Company's total overhead cost at various levels of activity are presented below: Month April Total Overhead Cost $ 213, eee $ 188,000 $ 238,eee 5.263, eee Machine - Hours 52,000 42,000 62,000 72,000 May June July Assume that the total overhead cost above consists of utilities, supervisory salaries, and maintenanc The breakdown of these costs at the 42,000 machine-hour level of activity is Utilities (variable) Supervisory salaries (fixed) Maintenance (mixed) Total overhead cost $ 54,600 67, eee 66,480 $188, eee Nova Company's management wants to break down the maintenance cost into its variable and fixe cost elements Required: 1. Estimate how much of the $263,000 of overhead cost in July was maintenance cost. (Hint to do may be helpful to first determine how much of the $263,000 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 47,000 machine hours? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Estimate how much of the $263,000 of overhead cost in July was maintenance cost. (Hint: to do this determine how much of the $263,000 consisted of utilities and supervisory salaries. Think about the fixed costs.) (Do not round intermediate calculations.) Maintenance cost in July Required Required 2 >
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