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

Month	Machine- Hours			Total Overhead Cost
April		52,000		$	182,640
May		42,000		$	158,940
June		62,000		$	206,340
July		72,000		$	230,040

Assume that the total overhead cost above consists of utilities, supervisory salaries, and maintenance. The breakdown of these costs at the 42,000 machine-hour level of activity is:

Utilities (variable)	$	54,600
Supervisory salaries (fixed)		44,000
Maintenance (mixed)		60,340
Total overhead cost	$	158,940

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

Required:

1. Estimate how much of the $230,040 of overhead cost in July was maintenance cost. (Hint: to do this, it may be helpful to first determine how much of the $230,040 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 47,000 machine-hours?