Question: Could you please help me to solve this question? Colby Limited is a manufacturing company whose total factory overhead costs fluctuate somewhat from year to

 Could you please help me to solve this question? Colby Limited

Could you please help me to solve this question?

is a manufacturing company whose total factory overhead costs fluctuate somewhat fromyear to year, according to the number of machine-hours worked in its

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: Level of Activity Low High Machine-hours 85,000 105,000 Total factory overhead costs $42,085,000 $47,005,000 The factory overhead costs above consist of indirect materials, rent. and maintenance. The company has analyzed these costs at the 85,000 machine-hours level of activity as follows: Indirect materials (variable) $15,215,000 Rent (fixed) 17,000,000 Maintenance (mixed) 9,870,000 Total factory overhead costs $42,085,000 For planning purposes, the company wants to break down the maintenance cost into its variable and xed cost elements. Required: 1. Estimate how much of the factory overhead cost of $47,005,000 at the high level of activity consists of maintenance cost. :I 2. Using the highlow method, estimate a cost formula for maintenance. -:-:- 3. What total overhead costs would you expect the company to incur at an operating level of 90.000 machine-hours? :|

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