4. Nova Company's total overhead cost at various levels of activity are presented below: Month April May June July Machine hours 70,000 60,000 80,000 90,000 Utilities (variable). Supervisory salaries (fixed)... Maintenance (mixed). Assume that the total overhead cost above consists of utilities, supervisory salaries, and maintenance. The breakdown of these May month's costs at the 60,000 machine-hour level of activity is: Total O/H cost $205,000 $174,000 $235,000 $255.000 $ 42,000 $27,000 $ 105,000 Total overhead cost......... $174,000 1. Estimate how much of the $255,000 of overhead cost in July was maintenance cost. 2. Using the high-low method, estimate a cost formula for maintenance, and identify the maintenance cost for 120,000 machine hours
4. Nova Company's total overhead cost at various levels of activity are presented below: Month April May June July Machine hours 70,000 60,000 80,000 90,000 Utilities (variable). Supervisory salaries (fixed)... Maintenance (mixed). Assume that the total overhead cost above consists of utilities, supervisory salaries, and maintenance. The breakdown of these May month's costs at the 60,000 machine-hour level of activity is: Total O/H cost $205,000 $174,000 $235,000 $255.000 $ 42,000 $27,000 $ 105,000 Total overhead cost......... $174,000 1. Estimate how much of the $255,000 of overhead cost in July was maintenance cost. 2. Using the high-low method, estimate a cost formula for maintenance, and identify the maintenance cost for 120,000 machine hours
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![4. Nova Company's total overhead cost at various levels of activity are presented below:
Month
April
May
June
July
Machine hours
70,000
60,000
80,000
90,000
Utilities (variable).
Supervisory salaries (fixed).
Maintenance (mixed)
Assume that the total overhead cost above consists of utilities, supervisory salaries, and
maintenance. The breakdown of these May month's costs at the 60,000 machine-hour level of
activity is:
$ 42,000
$ 27,000
$ 105,000
Total overhead cost......... $174,000
Total O/H cost
$205,000
$174,000
$235,000
$255.000
1. Estimate how much of the $255,000 of overhead cost in July was maintenance cost.
2. Using the high-low method, estimate a cost formula for maintenance, and identify the
maintenance cost for 120,000 machine hours](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0086c006-771a-4a18-9964-0eb5ef70a1a2%2F98b17465-81a7-4d25-92d5-d62bf4e93956%2Fuxusilq_processed.jpeg&w=3840&q=75)
Transcribed Image Text:4. Nova Company's total overhead cost at various levels of activity are presented below:
Month
April
May
June
July
Machine hours
70,000
60,000
80,000
90,000
Utilities (variable).
Supervisory salaries (fixed).
Maintenance (mixed)
Assume that the total overhead cost above consists of utilities, supervisory salaries, and
maintenance. The breakdown of these May month's costs at the 60,000 machine-hour level of
activity is:
$ 42,000
$ 27,000
$ 105,000
Total overhead cost......... $174,000
Total O/H cost
$205,000
$174,000
$235,000
$255.000
1. Estimate how much of the $255,000 of overhead cost in July was maintenance cost.
2. Using the high-low method, estimate a cost formula for maintenance, and identify the
maintenance cost for 120,000 machine hours
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