Problem $3-17$ High$-$Low Method; Predicting Cost $[$LO$1,$ LO$2]$

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:

$\backslash$table$[[,$Level of Activity$],[$Machine$-$hours,Low,High$],[$Total factory overhead costs,$$34,028,000,100,500],[,$$$40,508,000,]]$

The factory overhead costs above consist of indirect materials, rent, and maintenance. The company has analyzed these costs $--+$ he $70,500$ machine$-$hours level of activity as follows:

$\backslash$table$[[$Indirect materials $($variable$),$$$11,139,000$