company's total overhead cost at various levels of activity is presented below: Month March April May June Machine Hours 5,000 4,000 6,000 8,000 Total Overhead Cost $ 38,750 $ 31,000 $ 46,500 $ 55,000 Assume that the overhead cost above consists of utilities, supervisory salaries, and maintenance. The breakdown of these costs at the 4,000 machine-hour level of activity is as follows: Utilities (considered variable) $8,000 Supervisory salaries (considered fixed) $5,000 Maintenance (considered mixed) $18,000 $31,000 Total overhead cost Suppose the company uses the high-low method to estimate a cost formula for mixed costs. What is the total maintenance cost the company expects to incur at an activity level of 6,900 machine hours? $29,600 $29,200 $30,400 O $29,900

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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company's total overhead cost at various levels of activity is presented below:
Month
March
April
May
June
Machine Hours
5,000
4,000
6,000
8,000
Total Overhead Cost
$ 38,750
$ 31,000
$ 46,500
$ 55,000
Assume that the overhead cost above consists of utilities, supervisory salaries, and maintenance. The breakdown of these costs at the
4,000 machine-hour level of activity is as follows:
Utilities (considered variable)
$8,000
Supervisory salaries (considered fixed)
$5,000
Maintenance (considered mixed)
$18,000
Total overhead cost
$31,000
Suppose the company uses the high-low method to estimate a cost formula for mixed costs. What is the total maintenance cost the
company expects to incur at an activity level of 6,900 machine hours?
○ $29,600
$29,200
O $30,400
$29,900
Transcribed Image Text:company's total overhead cost at various levels of activity is presented below: Month March April May June Machine Hours 5,000 4,000 6,000 8,000 Total Overhead Cost $ 38,750 $ 31,000 $ 46,500 $ 55,000 Assume that the overhead cost above consists of utilities, supervisory salaries, and maintenance. The breakdown of these costs at the 4,000 machine-hour level of activity is as follows: Utilities (considered variable) $8,000 Supervisory salaries (considered fixed) $5,000 Maintenance (considered mixed) $18,000 Total overhead cost $31,000 Suppose the company uses the high-low method to estimate a cost formula for mixed costs. What is the total maintenance cost the company expects to incur at an activity level of 6,900 machine hours? ○ $29,600 $29,200 O $30,400 $29,900
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