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

Month	Machine- Hours			Total Overhead Cost
April		54,000		$	194,640
May		44,000		$	172,040
June		64,000		$	217,240
July		74,000		$	239,840

Assume that the total overhead cost above consists of utilities, supervisory salaries, and maintenance. The breakdown of these costs at the 44,000 machine-hour level of activity is:

Utilities (variable)	$	48,400
Supervisory salaries (fixed)		60,000
Maintenance (mixed)		63,640
Total overhead cost	$	172,040

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

Required:

1. Estimate how much of the $239,840 of overhead cost in July was maintenance cost. (Hint: to do this, it may be helpful to first determine how much of the $239,840 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 49,000 machine-hours?