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I believe in tbe relevany range fixed costs remain the same, so the supervisory salaries will remain $21,000.

Would the next step be to use the May activity level and find the percentages of how much Utilities and Maintenence contribute? Then multiply into the July overhead cost of $246,000 to get the amount? Am i on the right track? how would you complete this question with explanations? How do you find the right amount of utilities for July ao you can determine the maintenance cost?

Crosshill Company's total overhead costs at various levels of activity are presented below: 2 Total Overhead Cost Month Machine-Hours April 70,000 $198.000 May 60,000 $174.000 June 80.000 $222.000 July 90,000 $246,000 Assume that the overhead cost above consists of utilities, supervisory salaries, and maintenance. The breakdown of these Page 88 costs at the 60,000 machine-hour level of activity in May is as follows: Utilities (variable) $ 48,000 21,000 Supervisory salaries (fixed) Maintenance (mixed) Total overhead cost 105.000 $174.000 The company wants to break down the maintenance cost into its variable and fixed cost elements. Required: 1. Estimate how much of the $246,000 of overhead cost in July was maintenance cost. (Hint: To do this, first determine how much of the S246,000 consisted of utilities and supervisory salaries. Think about the behaviour of variable and fixed costs within the relevant range.)

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