Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. nova company's total overhead cost at various leve

Nova Company's total overhead cost at various levels of activity are presented below: Month April...

60.1K

Verified Solution

Question

Accounting

image

Nova Company's total overhead cost at various levels of activity are presented below: Month April May June July Machine- Hours 47,000 37,000 57,000 67,000 Total Overhead Cost $ 180, 900 $154,900 $206,900 $ 232,900 Assume that the total overhead cost above consists of utilities, supervisory salaries, and maintenance. The breakdown of these costs at the 37,000 machine-hour level of activity is: Utilities (variable) Supervisory salaries (fixed) Maintenance (mixed) Total overhead cost $ 51,800 46,000 57,100 $154,900 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 $232,900 of overhead cost in July was maintenance cost. (Hint: to do this, it may be helpful to first determine how much of the $232,900 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 42,000 machine-hours

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students