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Colby Limited is a manufacturing company whose total factory overhead costs fluctuate somewhat from year...

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Accounting

Colby Limited is a manufacturing company whose total factory overhead costs fluctuate somewhat from year to year, according to the
number of machine-hours worked in its production facility. These costs at high and low levels of activity over recent years are given
below:
The factory overhead costs above consist of indirect materials, rent, and maintenance. The company has analyzed these costs at the
82,700 machine-hours level of activity as follows:
For planning purposes, the company wants to break down the maintenance cost into its variable and fixed cost elements.
Required:
Estimate how much of the factory overhead cost of $47,096,900 at the high level of activity consists of maintenance cost.
Maintenance cost
Using the high-low method, estimate a cost formula for maintenance.
Y=
What total overhead costs would you expect the company to incur at an operating level of 87,700 machine-hours?
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