Problem 3-15 HighLow Method; Predicting Cost [L01, L02] Crosshill Company's total overhead costs at various levels of activity are presented below: Total Overhead Month MachineHours Cost April 70,000 $200,200 May 60,000 $177,300 June 80,000 $223,100 July 90,000 $246,000 Assume that the overhead cost above consists of utilities, supervisory salaries, and maintenance. The breakdown ofthese costs at the 60,000machinehour level of activity in May is as follows: Utilities (variable) $ 48,000 Supervisory salaries (fixed) 21,000 Maintenance (mixed) 108,300 Total overhead cost $177,300 The company wants to break down the maintenance cost into its variable and fixed cost elements. Required: 1. Estimate how much of the $246,000 of overhead cost in July was maintenance cost. (Hint:To do this, first determine how much of the $246,000 consisted of utilities and supervisory salaries. Think about the behaviour of variable and fixed costs within the relevant range.) (Round the "Variable cost per unit" to 2 decimal places.) Maintenance cost in July 2. Using the highlow method, estimate a cost formula for maintenance. (Round the "Variable cost per unit" to 2 decimal places.) _ 3. Express the company's total overhead cost in the form Y: a + bX. (Round the "Variable cost per unit" to 2 decimal places.) Utilities cost Supervisory salaries cost Maintenance cost Total overhead cost 4. What total overhead cost would you expect to be incurred at an activity level of 75,000 machine-hours? (Round the "Variable cost per unit" to 2 decimal places.) _:|