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Prince Companys total overhead costs at various levels of activity are presented below: Month Machine Hours Total Overhead Cost September 112,800 $ 781,512 October 89,200

Prince Companys total overhead costs at various levels of activity are presented below:

Month Machine Hours Total Overhead Cost
September 112,800 $ 781,512
October 89,200 $ 662,568
November 157,200 $ 1,005,288
December 165,000 $ 1,044,600

Assume that the overhead cost above consists of utilities, supervisory salaries, depreciation, and maintenance. The breakdown of these costs at the 89,200-machine-hour level of activity in October is as follows:

Utilities (variable) $ 233,704
Supervisory salaries and depreciation (fixed) 172,000
Maintenance (mixed) 256,864
Total overhead cost $ 662,568

The company wants to break down the maintenance cost into its variable and fixed cost elements.

Required:
1.

Estimate how much of the $1,044,600 of overhead cost in December was maintenance cost. (Hint: To do this, first determine how much of the $1,044,600 consisted of utilities and supervisory salaries. Think about the behaviour of variable and fixed costs within the relevant range.) (Do not round intermediate calculations.)

2.

Using the highlow method, estimate a cost formula for maintenance. (Round variable cost to 2 decimal places and fixed cost to the nearest dollar amount.)

3.

Express the companys total overhead cost in the form Y = a + bX. (Round variable cost to 2 decimal places and fixed cost to the nearest dollar amount.)

4.

What total overhead cost would you expect to be incurred at an activity level of 99,200 machine-hours? (Do not round intermediate calculations.)

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