Problem 5A-8 High-Low Method; Predicting Cost [LO5-10) Nova Company's total overhead cost at various levels of activity are presented below: Month April Total Overhead Cost $ 197, 100 $170, 600 $223,600 $ 250, 100 Machine- Hours 50,000 40,000 60,000 70,000 May June July Assume that the total overhead cost above consists of utilities, supervisory salaries, and maintenance. The breakdown of these costs at the 40,000 machine-hour level of activity is: Utilities (variable) Supervisory salaries (fixed) Maintenance (mixed) Total overhead cost $ 64,000 50,000 56, 600 $170, 600 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 $250,100 of overhead cost in July was maintenance cost. (Hint: to do this, it may be helpful to first determine how much of the $250,100 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 Ya+bX. 3. Express the company's total overhead cost in the form Y = a +bX 4. What total overhead cost would you expect to be incurred at an activity level of 45,000 machine-hours