Problem 5A-8 High-Low Method; Predicting Cost [L05-10] Nova Company's total overhead cost at various levels of activity are presented below: Total Machine- Overhead Month Hours Cost April 54,000 $201,540 May 44,000 $177,440 June 64,000 $225,640 July 74,000 $249,740 Assume that the total overhead cost above consists of utilities, supervisory salaries, and maintenance. The breakdown of these costs at the 44,000 machine-hour level of activity is: Utilities (variable) $ 57,200 Supervisory salaries (fixed) 57,000 Maintenance (mixed) 63,240 Total overhead cost $177,440 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 $249,740 of overhead cost in July was maintenance cost. (Hint: to do this, it may be helpful to first determine how much of the $249,740 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 in the form Y = a + bX