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

Month	Machine-Hours	Total Overhead Cost
April	55,000	$ 218,000
May	45,000	$ 193,000
June	65,000	$ 243,000
July	75,000	$ 268,000

Assume the total overhead cost above consists of utilities, supervisory salaries, and maintenance. The breakdown of these costs at the 45,000 machine-hour level of activity is:

Utilities (variable)	$ 58,500
Supervisory salaries (fixed)	61,000
Maintenance (mixed)	73,500
Total overhead cost	$ 193,000

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

Required:

1. 1. Estimate how much of the $268,000 of overhead cost in July was maintenance cost. (Hint: To do this, it may be helpful to first determine how much of the $268,000 consisted of utilities and supervisory salaries. Think about the behavior of variable and fixed costs.)
2. 2. Using the high-low method, estimate a cost formula for maintenance in the form Y = a + bX.
3. 3. Express the company’s total overhead cost in the form Y = a + bX.
4. 4. What total overhead cost would you expect at an activity level of 50,000 machine-hours?