Problem 6A-8 (Algo) High-Low Method; Predicting Cost [LO6-10] Nova Company's total overhead cost at various levels of activity are presented below: 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: Nova Company's management wants to break down the maintenance cost into its variable and fixed cost elements. Required: 1. Estimate how much of the $235,000 of overhead cost in July was maintenance cost. (Hint: to do this, it may be helpful to first determine how much of the $235.000 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 company's total overhead cost in the form Y=a+bX 4. What fotal overhead cost would you expect to be incurred at an activity level of 45.000 machine-hours? Complete this question by entering your answers in the tabs below. Express the company's total overhead cost in the form Y=a+bX. What total overhead cost would you expect to be incurred at an activity level of 45,000 machine-hours? Complete this question by entering your answers in the tabs below. Estimate how much of the $235,000 of overhead cost in July was maintenance cost. (Hint: to do this, it may be helpful to first determine how much of the $235,000 consisted of utilities and supervisory salaries. Think about the behavior of variable. and fixed costs.) (Do not round intermediate calculations.) Express the company's total overhead cost in the form Y=a+bX. What total overhead cost would you expect to be incurred at an activity level of 45,000 machine-hours? Complete this question by entering your answers in the tabs below. Using the high-low method, estimate a cost formula for maintenance in the form =a+bX. (Do not round your intermediate calculations. Round the "Variable cost per machine hour" to 2 decimal places.) Complete this question by entering your answers in the tabs below. Express the company's total ovechead cost in the form Y=a+bX. (Do not round your intermediate calculations. Round the "Variable cost per machine hour" to 2 decimal places.) how much of the $235,000 consisted of utilities and supervisory salarles. Think cost. (Hint to do this, it may be heipful to first determine 2. Using the high-low method, estimate a cost formula for maintenance in the form Y behavior of variable and fixed costs.) 3. Express the company's total overhead cost in the formula for maintenance in the form Y=a+bX. 4. What total overhead cost would you expect to be incurred at an a. 4. What total overhead cost would you expect to be incurred at an activity level of 45,000 machine-hours? Complete this question by entering your answers in the tabs below. What total overhead cost would you expect to be incurred at an activity level of 45,000 machine-hours? (Do not round intermediate calculations.)
