Question-4: Sumaiya Co., Ltd., of Bangladesh is a manufacturing company whose total factory overhead costs fluctuate considerably from year to year according to increases and decreases in the number of direct labor-hours worked in the factory. Total factory overhead costs at high and low levels of activity for recent years are given below: Particulars Level of Activity Low High Direct Labor Hour (DLH) 40,000 65,000 Total Factory Overhead Cost (tk.) 14,000,000 19,000,000 The factory overhead costs above consist of indirect materials, rent, and maintenance. The company has analysed these costs at the 65,000-hour level of activity as follows: Indirect materials (variable) . . . . . . . . . . . . . . . . . . . . .. tk. 10,000,000 Rent (fixed) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. ...5,000,000 Maintenance (mixed)* . . . . . . . . . . . . . . . . . . . . . . . .. . 4,000,000 Total factory overhead costs . . . . . . . . . . . . . . . . . tk. 19,000,000 To have data available for planning, the company wants to break down the maintenance cost into its variable and fixed cost elements. Required: a) Estimate how much of the tk.20,000,000 factory overhead cost at the high level of activity consists of maintenance cost. b) Using the high-low method, estimate a cost formula for the maintenance Cost. c) Develop a cost formula for the total factory overhead cost. d) What total factory overhead costs would you expect the company to incur at an operating level of 60,000 direct labour-hours?