Prospero Corporations total overhead costs at various levels of activity are presented below:

	Month	Machine-Hours	Total Overhead Costs
	August	8,000	$119,400
	September	12,000	$142,800
	October	16,000	$166,200
	November	4,000	$93,120

Assume that the total overhead costs above consist of utilities, supervisory salaries, and maintenance. The breakdown of these costs at the 4,000 machine-hour level of activity is:

	Utilities (variable)	$11,520
	Supervisory salaries (fixed)	15,600
	Maintenance (mixed)	66,000
	Total overhead costs	$93,120

Prospero Corporations management wants to break down the maintenance cost into its basic variable and fixed cost elements.

Required:

(1). Estimate how much of the $166,200 of overhead cost in October was maintenance cost. (Hint: to do this, it may be helpful to first determine how much of the $166,200 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.

(3). Express the companys total overhead costs in the linear equation form Y = a + bX.

(4). What total overhead costs would you expect to be incurred at an operating activity level of 15,000 machine-hours?