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 Cost April 55,000 $225,700 May 45,000 $ 198,700 June 65,000 $ 252,700 75,00 $ 279,700 July Assume that the total overhead cost above consists of Utilities, supervisory salaries, and maintenance. The breakdown of these costs at the 45,000 machine-hour level of activity is Utilities (variable) Supervisory salaries (fixed) Maintenance (mixed) Total overhead cost $ 67,500 59,00 72,200 $198, 700 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 $279,700 of overhead cost in July was maintenance cost. (Hint: to do this, it may be helpful to first determine how much of the $279,700 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 50,000 machine-hours