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Nova Company's total overhead cost at various levels of activity are presented below. Month April...

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Accounting

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Nova Company's total overhead cost at various levels of activity are presented below. Month April MAY June July Machine- Hours 51.000 41.000 61,000 71,000 Total Overhead Cost $ 181,310 $ 158,210 $ 204, 410 $227,510 Assume that the total overhead cost above consists of utilities, supervisory salaries, and maintenance. The breakdown of these costs at the 41,000 machine-hour level of activity is: Utilities (variable) Supervisory salaries (fixed) Maintenance (mixed) Total overhead cost $ 49,200 51,000 58,010 $158,210 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 $227,510 of overhead cost in July was maintenance cost. (Hint: to do this, it may be helpful to first determine how much of the $227,510 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 in the form Y a +bX 3. Express the company's total overhead cost in the form Y = a + bx 4. What total overhead cost would you expect to be incurred at an activity level of 46,000 machine-hours

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