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

Month	Machine- Hours			Total Overhead Cost
April		50,000		$	191,100
May		40,000		$	163,800
June		60,000		$	218,400
July		70,000		$	245,700

Assume that the total overhead cost above consists of utilities, supervisory salaries, and maintenance. The breakdown of these costs at the 40,000 machine-hour level of activity is:

Utilities (variable)	$	60,000
Supervisory salaries (fixed)		40,000
Maintenance (mixed)		63,800
Total overhead cost	$	163,800

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

Required:

1. Estimate how much of the $245,700 of overhead cost in July was maintenance cost. (Hint: to do this, it may be helpful to first determine how much of the $245,700 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 45,000 machine-hours?

Estimate how much of the $245,700 of overhead cost in July was maintenance cost. (Hint: to do this, it may be helpful to first determine how much of the $245,700 consisted of utilities and supervisory salaries. Think about the behavior of variable and fixed costs.) (Do not round intermediate calculations.) Maintenance cost in July Using the high-low method, estimate a cost formula for maintenance in the form Y = a + bX. (Do not round your intermediate calculations. Round the "Variable cost per unit" to 2 decimal places.) Y = Required 1 Required 2 Required 3 Required 4 --- Express the company's total overhead cost in the form Y = a + bX. (Do not round your intermediate calculations. Round the "Variable cost per unit" to 2 decimal places.) Variable Cost per Machine- Fixed Cost Hour Utilities cost Supervisory salaries cost Maintenance cost Total overhead cost Y = What total overhead cost would you expect to be incurred at an activity level of 45,000 machine-hours? (Do not round intermediate calculations.) Total overhead cost