Problem 6A-8 High-Low Method; Predicting Cost [L06-10) Nova Company's total overhead cost at various levels of activity are presented below: Total Machine Overhead Month Hours Coxt April 45.000 $ 162.900 May 35,000 $ 158,900 June 55.000 5 206,900 July 65,000 3230,900 Assume that the total overhead cast above consists of utilities, supervisory salaries, and maintenance. The breakdown of these costs at the 35,000 machine-hour level of activity is: Utilities (variable) Supervisory salaries (fixed) Maintenance (mixed) Total overhead cost $ 45,500 58,000 55,400 $ 158,900 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 $230,900 of overhead cost in July was maintenance cost. (Hint to do this, it may be helpful to first determine how much of the $230 900.consisted of utilities and supervisor salaries Think about the behavior of variable and fixed Required: 1. Estimate how much of the $230,900 of overhead cost in July was maintenance cost. (Hint to do this, it may be helpful to first determine how much of the $230,900 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 total overhead cost would you expect to be incurred at an activity level of 40,000 machine-hours? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Estimate how much of the $230,900 of overhead cost in July was maintenance cost. (Hint: to do this, it may be helpful to first determine how much of the $230,900 consisted of utilities and supervisory salaries. Think about the behavior of variable and fixed costs) (Do not found intermediate calculations.) Maintenance cost in July Required 2 > 5 Required: 1 Estimate how much of the $230,900 of overhead cost in July was maintenance cost. (Hint: to do this, it may be helpful to first determine how much of the $230.900 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 Ya+bX 3. Express the company's total overhead cost in the form Ya+bx 4. What total overhead cost would you expect to be incurred at an activity level of 40,000 machine-hours? Sed Complete this question by entering your answers in the tabs below Required 1 Required 2 Required Required 4 Using the high low method, estimate a cost formula for maintenance in the form YX (Do not round your intermediate calculations, Round the "Variable cost per unit to 2 decimal places) Required 1 Rend Check my 1. Estimate how much of the $230,900 of overhead cost in July was maintenance cost. (Hint to do this, it may be helpful to first determine how much of the $230, 900 consisted of utilities and supervisory stories. Think about the behavior of variable and fixed costs.) 2. Using the high-low method, estimate a cost formula for maintenance in the form yox, 3. Express the company's total overhead cost in the form Yabx 4. What total overhead cost would you expect to be incurred at an activity level of 40,000 machine-hours? Complete this question by entering your answers in the tabs below Required 1 Required 2 Required 3 Required 4 Express the company's total overhead cost in the form Ya+bx (Do not round your intermediate calculation. Round the variable cost per unit" to 2 decimal places Variable Cost per Machine Hour Fixed Cost Utilities cost Supervisory salaries cont Maintenance cost Total overhead cost 1. Estimate how much of the $230,900 of overhead cost in July was maintenance cost. (Hint: to do this, it may be helpful to first determine how much of the $230,900 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 total overhead cost would you expect to be incurred at an activity level of 40,000 machine-hours? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 What total overhead cost would you expect to be incurred at an activity level of 40,000 machine-hours? (Do not round intermediate calculations.)
