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Managerial accounting questions - cost behavious and CVP question ...

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Accounting

Managerial accounting questions - cost behavious and CVP question
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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 79,000 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: 1. Estimate how much of the factory overhead cost of $40,632,000 at the high level of activity consists of maintenance cost. 2. Using the high-low method, estimate a cost formula for maintenance. 3. What total overhead costs would you expect the company to incur at an operating level of 84,000 machine-hours

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