Nova Company's total overhead cost at various levels of activity are presented below: Assume that...
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Nova Company's total overhead cost at various levels of activity are presented below: Assume that the total overhead cost above consists of utilities, supervisory salaries, and maintenance. The breakdown of these costs at the 44,000 machine-hour level of activity is: Nova Company's management wants to break down the maintenance cost into its variable and fixed cost elements. Required: 1. Estimate how much of the $241,020 of overhead cost in July was maintenance cost. (Hint: to do this, it may be helpful to first determine how much of the $241,020 consisted of utilities and supervisory salaries. Think about the behavior of variable and fixed costs.) 2. Using the high-low method, estimate a cost formula for maintenance in the form Y=a+bX. 3. Express the company's total overhead cost in the form Y=a+bX. 4. What total overhead cost would you expect to be incurred at an activity level of 49,000 machine-hours
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