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Nova Companys total overhead cost at various levels of activity are presented below: Month Machine- Hours Total Overhead Cost April 54,000 $ 220,220 May 44,000

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

Month Machine- Hours Total Overhead Cost
April 54,000 $ 220,220
May 44,000 $ 194,420
June 64,000 $ 246,020
July 74,000 $ 271,820

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) $ 66,000
Supervisory salaries (fixed) 64,000
Maintenance (mixed) 64,420
Total overhead cost $ 194,420

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

Required:

1. Estimate how much of the $271,820 of overhead cost in July was maintenance cost. (Hint: to do this, it may be helpful to first determine how much of the $271,820 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?

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Estimate how much of the $271,820 of overhead cost in July was maintenance cost. (Hint: to do this, it may be helpful to first determine how much of the $271,820 consisted of utilities and supervisory salaries. Think about the behavior of variable and fixed costs.) (Do not round intermediate calculations.) Maintenance cost in July

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