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

Month	Machine- Hours			Total Overhead Cost
April		48,000		$	199,940
May		38,000		$	172,640
June		58,000		$	227,240
July		68,000		$	254,540

Assume that the total overhead cost above consists of utilities, supervisory salaries, and maintenance. The breakdown of these costs at the 38,000 machine-hour level of activity is:

Utilities (variable)	$	57,000
Supervisory salaries (fixed)		54,000
Maintenance (mixed)		61,640
Total overhead cost	$	172,640

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

Required:

1. Estimate how much of the $254,540 of overhead cost in July was maintenance cost. (Hint: to do this, it may be helpful to first determine how much of the $254,540 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 43,000 machine-hours?