Problem 2-17 High-Low Method; Predicting Cost [LO2-4, LO2-5] Sawaya Co., Ltd., of Japan is a manufacturing company whose total factory overhead costs fluctuate considerably from year to year according to increases and decreases in the number of direct labor-hours worked in the factory. Total factory overhead costs at high and low levels of activity for recent years are given below:

Level of Activit Low 60,900 Direct labor-hours Total factory overhead costs 81,200 $275,220 $311,760 The factory overhead costs above consist of indirect materials, rent, and maintenance. The company has analyzed these costs at the 60,900-hour level of activity as follows Indirect materials (variable) Rent (fixed) Maintenance (mixed) $ 85,260 139,000 50,960 Total factory overhead costs $275,220 To have data available for planning, the company wants to break down the maintenance cost into its variable and fixed cost elements Required 1. Estimate how much of the $311,760 factory overhead cost at the high level of activity consists of maintenance cost. (Hint: To do this, it may be helpful to first determine how much of the $311,760 consists of indirect materials and rent. Think about the behavior of variable and fixed costs!) (Do not round intermediate calculations.) Maintenance cost at high level of activity