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Nova Company's total overhead cost at various levels of activity are presented below:
Nova Company's total overhead cost at various levels of activity are presented below: Month Machine-Hours TotalOverhead Cost --------------------------------------------------------------------------------Assume that the total overhead cost above consists of utilities, supervisory salaries, and maintenance. The breakdown of these costs at the 42,000 machine-hour level of activity is:--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------Nova Company's management wants to break down the maintenance cost into its variable and fixed cost elements.Requirement 1: Estimate how much of the $229,145 of overhead cost in July was maintenance cost. (Hint: to do this, it may be helpful to first determine how much of the $229,145 consisted of utilities and supervisory salaries. Think about the behavior of variable and fixed costs!) (Omit the "$" sign in your response.)Requirement 2: Using the high-low method, estimate a cost formula for maintenance. (Round the variable portion of the formula to 2 decimal places. Omit the "$" sign in your response.) Y = $ + $ X Requirement 3: Express the company's total overhead cost in the linear equation form Y = a +bX. (Round the variable portion of the formula to 2 decimal places. Omit the "$" sign in your response.) Y = $ + $ X Requirement 4: What total overhead cost would you expect to be incurred at an operating activity level of 46,200 machine-hours? (Round your answer to the nearest dollar amount. Omit the "$" sign in your response.)
