Problem should be solved in Excel.

PROBLEM 2-20 High-Low Method; Predicting Cost [LO 2-4, LO 2-5) Nova Company's total overhead cost at various levels of activity are presented below: Month April May June July Machine Hours 70.000 60.000 80,000 90.000 Total Overhead Cost $198.000 $174.000 $222.000 $246.000 Assume that the total overhead cost above consists of utilities, supervisory salaries, and main- tenance. The breakdown of these costs at the 60,000 machine-hour level of activity is Utilities (variable)... Supervisory salaries (ixed)... Maintenance ( m ed)...... Total overhead cost....... $ 48,000 21,000 105.000 $174,000 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 $246,000 of overhead cost in July was maintenance cost. (Hint: to do this, it may be helpful to first determine how much of the $246,000 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. Express the company's total overhead cost in the linear equation form Y = a + bx 4. What total overhead cost would you expect to be incurred at an activity level of 75,000 machine-hours? 3. Free