CoursHeroTranscribedText: PROBLEM 5: Makina Company's total overhead costs at various levels of activity are presented...
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CoursHeroTranscribedText: PROBLEM 5: Makina Company's total overhead costs at various levels of activity are presented below: Month Machine Hours Total Overhead Costs April 140,000 P1 98,000 May 120,000 1 74,000 June 160,000 222,000 July 180,000 246,000 Assume that the total overhead costs above consist of utilities, supervisory salaries, and maintenance. The breakdown of these costs at the 120,000 machinehour level of activity is: Utilities (V) P 48,000 Supervisory salaries [F] 21,000 Maintenance [M] 105,000 Total overhead costs P 174,000 112 variable: F 2 xed,- M 2 mixed Makjna Company's management wants to break down the maintenance cost into its basic variable and xed cost elements. Required: 1. As shown above, overhead costs in July amounted to P246,000. Determine how much of this consisted of maintenance cost. 2. By means of the highlow method, estimate a cost formula for maintenance. 3. Express the company's total overhead costs in the linear equation form Y = a + bx. 4. What total overhead costs would you expect to be incurred at an operating activity level of 150,000 machine- hours
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