PROBLEM 3-15 High-Low Method: Predicting Cost [LO1, LO2] Prince Company's total overhead costs at various levels of activity are presented below: Direct Total Labour- Overhead Month Hours Cost September 100,000 $388,000 October 80,000 $340,400 November 135,000 $485,600 December. 140,000 $483,200 Assume that the overhead cost above consists of utilities, supervisory salaries, depreciation, and maintenance. The breakdown of these costs at the 80,000-machine-hour level of activity in October is as follows: Utilities (variable).. Supervisory salaries $104,000 and depreciation (fixed). 120,000 I Maintenance (mixed) 116,400 Total overhead cost.. $340,400 The company wants to break down the maintenance cost into its variable and fixed cost elements. Required: 1. 234 Estimate how much of the $483,200 of overhead cost in December was maintenance cost. (Hint: To do this, first determine how much of the $483,200 consisted of utilities and su- pervisory salaries. Think about the behaviour of variable and fixed costs within the rele- vant range.) Using the high-low method, estimate a cost formula for maintenance. 3. Express the company's total overhead cost in the form Y= a + bx. What total overhead cost would you expect to be incurred at an activity level of 90,000 machine-hours?