value: 10.00 points 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: Level of Activity Low High Direct labor-hours 53,700 71,600 Total factory overhead costs $ 243,390 $ 273,820 The factory overhead costs above consist of indirect materials, rent, and maintenance. The company has analyzed these costs at the 53,700-hour level of activity as follows: Indirect materials (variable) $ 69,810 Rent (fixed) 125,000 Maintenance (mixed) 48,580 Total factory overhead costs $ 243,390 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 $273,820 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 $273,820 consists of indirect materials and rent. Think about the behavior of variable and fixed costs!) (Do not round intermediate calculations.) 2. Using the high-low method, estimate a cost formula for maintenance. (Do not round intermediate calculations.) 3. What total factory overhead costs would you expect the company to incur at an operating level of 59,070 direct labor-hours? (Do not round intermediate calculations.)

Level of Activity High Direct labor-hours 53,700 71,600 Total factory overhead costs $243,390 $273,820 The factory overhead costs above consist of indirect materials, rent, and maintenance. The company has analyzed these costs at the 53,700-hour level of activity as follows: 69,810 Indirect materials (variable) Rent (fixed) 125,000 Maintenance (mixed) 48,580 $243,390 Total factory overhead costs 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 $273,820 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 $273,820 consists of indirect materials and rent. Think about the behavior of variable and fixed costs (Do not round intermediate calculations.) aintenance cost at high level of activity 2. Using the high-low method, estimate a cost formula for maintenance. (Do not round intermediate calculations Direct Labor- Maintenance Hours Cost High level of activity Low level of activity Change Variable cost element per DLH Fixed cost element