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Problem 3-15 High-Low Method; Predicting Cost [LO1, LO2] Crosshill Company's total overhead costs at various levels of activity are presented below Month April May
Problem 3-15 High-Low Method; Predicting Cost [LO1, LO2] Crosshill Company's total overhead costs at various levels of activity are presented below Month April May 18 Machine-Hours Overhead Cost Total 48,000 $193,020 38,000 $170,120 58,000 $215,920 68,000 $238,020 June July Assume that the overhead cost above consists of utilities, supervisory salaries, and maintenance. The breakdown of these costs at the 38,000-machine-hour level of activity in May is as follows: Utilities (variable) Supervisory salaries (fixed) Maintenance (mixed) Total overhead cost $ 45,600 69,000 55,520 170,120 The company wants to break down the maintenance cost into its variable and fixed cost elements Required: 1. Estimate how much of the $238,820 of overhead cost in July was maintenance cost. (Hint: To do this, first determine how much of the $238,820 consisted of utilities and supervisory salaries. Think about the behaviour of variable and fixed costs within the relevant range.) (Do not round intermediate calculations.) Maintenance cost in July
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