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

Month	Machine-Hours	Total Overhead Cost
April	51,000	$215,370
May	41,000	$188,670
June	61,000	$242,070
July	71,000	$268,770

Assume that the total overhead cost above consists of utilities, supervisory salaries, and maintenance. The breakdown of these costs at the 41,000 machine-hour level of activity is:

Utilities (variable)	$	65,600
Supervisory salaries (fixed)		61,000
Maintenance (mixed)		62,070
Total overhead cost	$	188,670

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

Required:

1.

Estimate how much of the $268,770 of overhead cost in July was maintenance cost. (Hint: To do this, it may be helpful to first determine how much of the $268,770 consisted of utilities and supervisory salaries. Think about the behavior of variable and fixed costs!) (Do not round intermediate calculations.)

	Maintenance cost in July___________

2.

Using the high-low method, estimate a cost formula for maintenance. (Do not round your intermediate calculations. Round the "Variable cost per unit" to 2 decimal places.)

	Machine- Hours	Maintenance Cost
High activity level
Low activity level
Change	0	$0
Variable cost element		per MH
Fixed cost element

Y=______+______x

3.

Express the companys total overhead cost in the linear equation form Y = a + bX. (Do not round your intermediate calculations. Round the "Variable cost per unit" to 2 decimal places.)

	Variable Cost per
	Machine-Hour	Fixed Cost
Utilities cost
Supervisory salaries cost
Maintenance cost
Total overhead cost	$0.00	$0

Y=______+______x

4.	What total overhead cost would you expect to be incurred at an activity level of 46,000 machine-hours? (Do not round intermediate calculations.)

Total overhead cost

____________