Problem 3-15 High-Low Method; Predicting Cost (LOI, LO2] Crosshill Company's total overhead costs at various levels of activity are presented below: Month April May June July Machine-Hours 120,000 11 , 13 , 14 , Total Overhead Cost $206,800 $319 , $361,000 $391, Assume that the overhead cost above consists of utilities, supervisory salaries, and maintenance. The breakdown of these costs at the 110,000-machine-hour level of activity in May is as follows: Utilities (variable) Supervisory salaries (fixed) Maintenance (mixed) Total overhead cost $ 88,000 25,000 125,000 $238,000 The company wants to break down the maintenance cost into its variable and fixed cost elements. Required: 1. Estimate how much of the $391,000 of overhead cost in July was maintenance cost. (Hint: To do this, first determine how much of the $391,000 consisted of utilities and supervisory salaries. Think about the behaviour of variable and fixed costs within the relevant range.) (Round the "Variable cost per unit" to 2 decimal places.) Maintenance cost in July 2. Using the high-low method, estimate a cost formula for maintenance. (Round the "Variable cost per unit" to 2 decimal places.) Machine- Hours Maintenance Cost High activity level Low activity level Change 0 $ per MH Variable cost element Fixed cost element Y= 3. Express the company's total overhead cost in the form Y = a +bX. (Round the "Variable cost per unit" to 2 decimal places.) Variable Cost per Machine-Hour Fixed Cost Utilities cost Supervisory salaries cost Maintenance cost Total overhead cost $ 0.00 S 0 Y= X 4. What total overhead cost would you expect to be incurred at an activity level of 78,000 machine-hours? (Round the "Variable cost per unit" to 2 decimal places.) Total overhead cost