Problem 6A-8 High-Low Method; Predicting Cost [LO6-10] Nova Company's total overhead cost at various levels of activity are presented below Total Overhead Machine- Month Hours Cost $188,520 $ 164,120 $ 212,920 237,320 April May June ly 48,00e 38,000 58,000 68,eee Assume that the total overhead cost above consists of utilities, supervisory salaries, and maintenance. The breakdown of these costs at the 38,000 machine-hour level of activity is: Utilities (variable) Supervisory salaries (fixed) Maintenance (mixed) $ 49,400 53,000 61,720 Total overhead cost $164,120 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 $237,320 of overhead cost in July was maintenance cost. (Hint: to do this, it may be helpful to first determine how much of the $237,320 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 Y#a bX 4. What total overhead cost would you expect to be incurred at an actlvity level of 43,000 machine-hours