Sawaya Co., Ltd., of Japan 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: Direct labor-hours Total factory overhead costs Level of Activity Low High 67,800 90,400 $308,540 $360,520 The factory overhead costs above consist of indirect materials, rent, and maintenance. The company has analyzed these costs at the 67,800-hour level of activity as follows: Indirect materials (variable) Rent (fixed) Maintenance (mixed) $ 122,040 123,000 63,500 Total factory overhead costs $308,540 To have data available for planning, the company wants to break down the maintenance cost into its variable and fixed cost elements. Required: 1. Estimate how much of the $360,520 factory overhead cost at the high level of activity consists of maintenance cost. (Hint: To do this, it may be helpful to first determine how much of the $360,520 consists of indirect materials and rent. Think about the behavior of variable and fixed costs!) (Do not round intermediate calculations.) Maintenance cost at high level of activity 2. Using the high-low method, estimate a cost formula for maintenance. (Do not round intermediate calculations. Round "Variable cost element" to 2 decimal places.) Direct Labor- Hours Maintenance Cost High level of activity Low level of activity Change per DLH Variable cost element Fixed cost element Y = + 3. What total factory overhead costs would you expect the company to incur at an operating level of 74,580 direct labor-hours? (Do not round intermediate calculations.) Total factory overhead cost