Question: Please help me answer the following exercise Exercise 2: Nova Company's total overhead cost at various levels of activity are presented below: Total Machine- Overhead

Please help me answer the following exercise Please help me answer the following exercise Exercise 2: Nova Company's total

Exercise 2: Nova Company's total overhead cost at various levels of activity are presented below: Total Machine- Overhead Month Hours Cost April 70,000 $198,000 May 60,000 $174,000 June 80,000 $222,000 July 90,000 $246,000 Assume that the total overhead cost above consists of utilities, supervisory salaries, and maintenance. The breakdown of these costs at the 60,000 machine-hour level of activity is: Utilities (variable) $ 48,000 Supervisory salaries (fixed) 21,000 Maintenance (mixed) 105,000 Total overhead cost $174,000 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 $246,000 of overhead cost in July was maintenance cost. (Hint: to do this, it may be helpful to first determine how much of the $246,000 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. 3. Express the company's total overhead cost in the linear equation form Y= a +bXy 4. What total overhead cost would you expect to be incurred at an activity level of 75,000 machine- hours

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