1. Estimate how much of the $217,560 of overhead cost in July was maintenance cost. (Hint: to do this, it may be helpful

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1. Estimate how much of the $217,560 of overhead cost in July
was maintenance cost. (Hint: to do this, it may be helpful to first
determine how much of the $217,560 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 41,000 machine-hours?

1 Estimate How Much Of The 217 560 Of Overhead Cost In July Was Maintenance Cost Hint To Do This It May Be Helpful 1 (296.96 KiB) Viewed 104 times

Nova Company's total overhead cost at various levels of activity are presented below: Month April May June July Machine- Hours 46,000 36,000 56,000 66,000 Total Overhead Cost $ 171,360 $ 148,260 $ 194,460 $ 217,560 Assume that the total overhead cost above consists of utilities, supervisory salaries, and maintenance. The breakdown of these costs at the 36,000 machine-hour level of activity is: Utilities (variable) Supervisory salaries (fixed) Maintenance (mixed) Total overhead cost $ 39,600 46,000 62,660 $ 148, 260 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 $217,560 of overhead cost in July was maintenance cost. (Hint: to do this, it may be helpful to first determine how much of the $217,560 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 41,000 machine-hours?
Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Estimate how much of the $217,560 of overhead cost in July was maintenance cost. (Hint: to do this, it may be helpful to first determine how much of the $217,560 consisted of utilities and supervisory salaries. Think about the behavior of variable and fixed costs.) (Do not round intermediate calculations.) Maintenance cost in July $ 29,660 X < Required 1 Required 2 >
X Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Using the high- Required 2 imate a cost formula for maintenance in the form Y = a + bx. (Do not round your intermediate calculations. Round the "Variable cost per unit" to 2 decimal places.) Y = $ 148,260 + $ 2.31 X X < Required 1 Required 3 >
Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Express the company's total overhead cost in the form Y = a + bx. (Do not round your intermediate calculations. Round the "Variable cost per unit" to 2 decimal places.) Variable Cost per Machine- hour $ 1.10 Fixed Cost Utilities cost Supervisory salaries cost Maintenance cost $ 46,000 1.12 X 148,260 X 2.22 $ 194,260 Total overhead cost $ Y= $ 194,260 X + $ 2.22 X Х < Required 2 Required 4 >
Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 What total overhead cost would you expect to be incurred at an activity level of 41,000 machine-hours? (Do not round intermediate calculations.) Total overhead cost $ 285,280 X < Required 3 Required 4