Problem 6A-8 (Algo) High-Low Method; Predicting Cost [LO6-10] Nova Companys total overhead cost at various levels of activity are presented below: Month Machine-Hours Total Overhead Cost April 47,000 $ 187,950 May 37,000 $ 162,450 June 57,000 $ 213,450 July 67,000 $ 238,950 Assume that the total overhead cost above consists of utilities, supervisory salaries, and maintenance. The breakdown of these costs at the 37,000 machine-hour level of activity is: Utilities (variable) $ 51,800 Supervisory salaries (fixed) 51,000 Maintenance (mixed) 59,650 Total overhead cost $ 162,450 Nova Companys management wants to break down the maintenance cost into its variable and fixed cost elements. Required: 1. Estimate how much of the $238,950 of overhead cost in July was maintenance cost. (Hint: to do this, it may be helpful to first determine how much of the $238,950 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. 3. Express the companys 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 42,000 machine-hours?