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es May June July 37,000 57,000 67,000 Assume the total overhead cost above consists of utilities, supervisory salaries, and maintenance. The breakdown of these 37,000 machine-hour level of activity is: Utilities (variable) Supervisory salaries (fixed) Maintenance (mixed) Total overhead cost $ 55,500 42,000 56,860 $ 154,360 Nova Company's management wants to break down the maintenance cost into its variable and fixed cost elements. $ 154,360 $ 207,960 $ 234,760 Required: 1. Estimate how much of the $234,760 of overhead cost in July was maintenance cost. (Hint: To do this, it may be helpful determine how much of the $234,760 consisted of utilities and supervisory salaries. Think about the behavior of variab costs.) 2. Using the high-low method, estimate a cost formula for maintenance in the form Y = a + bX. 3. Express the company's total overhead cost in the form Y = a +bX. 4. What total overhead cost would you expect at an activity level of 42,000 machine-hours? Complete this question by entering your answers in the tabs below. Required 1 Required 3 Required 2 Express the company's total overhead cost in the form Y = a + bx. Note: Do not round your intermediate calculations. Round the "Variable cost per machine hour" to 2 decimal places. Utilities cost Supervisory salaries cost Maintenance cost Total overhead cost Y = Variable Cost per Machine- Hour $ 55,500.00 Required 4 $ 55,500.00 Fixed Cost $ 0 X

es May June July 37,000 57,000 67,000 Assume the total overhead cost above consists of utilities, supervisory salaries, and maintenance. The breakdown of these 37,000 machine-hour level of activity is: Utilities (variable) Supervisory salaries (fixed) Maintenance (mixed) Total overhead cost $ 55,500 42,000 56,860 $ 154,360 Nova Company's management wants to break down the maintenance cost into its variable and fixed cost elements. $ 154,360 $ 207,960 $ 234,760 Required: 1. Estimate how much of the $234,760 of overhead cost in July was maintenance cost. (Hint: To do this, it may be helpful determine how much of the $234,760 consisted of utilities and supervisory salaries. Think about the behavior of variab costs.) 2. Using the high-low method, estimate a cost formula for maintenance in the form Y = a + bX. 3. Express the company's total overhead cost in the form Y = a +bX. 4. What total overhead cost would you expect at an activity level of 42,000 machine-hours? Complete this question by entering your answers in the tabs below. Required 1 Required 3 Required 2 Express the company's total overhead cost in the form Y = a + bx. Note: Do not round your intermediate calculations. Round the "Variable cost per machine hour" to 2 decimal places. Utilities cost Supervisory salaries cost Maintenance cost Total overhead cost Y = Variable Cost per Machine- Hour $ 55,500.00 Required 4 $ 55,500.00 Fixed Cost $ 0 X

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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ok nt ences May June July 37,000 57,000 67,000 Assume the total overhead cost above consists of utilities, supervisory salaries, and maintenance. The breakdown of these c 37,000 machine-hour level of activity is: Utilities (variable) Supervisory salaries (fixed) Maintenance (mixed) Total overhead cost Required 1 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 $234,760 of overhead cost in July was maintenance cost. (Hint: To do this, it may be helpful to determine how much of the $234,760 consisted of utilities and supervisory salaries. Think about the behavior of variable costs.) 2. Using the high-low method, estimate a cost formula for maintenance in the form Y = a +bX. 3. Express the company's total overhead cost in the form Y = a +bX. 4. What total overhead cost would you expect at an activity level of 42,000 machine-hours? $ 154,360 $ 207,960 $ 234,760 Complete this question by entering your answers in the tabs below. Required 2 Y = Utilities cost Supervisory salaries cost Maintenance cost Total overhead cost Express the company's total overhead cost in the form Y = a + bx. Note: Do not round your intermediate calculations. Round the "Variable cost per machine hour" to 2 decimal places. $ 55,500 42,000 56,860 $ 154,360 Required 3 Required 4 Variable Cost per Machine- Hour $ 55,500.00 $ 55,500.00 Fixed Cost $ 0 Next
Transcribed Image Text:ok nt ences May June July 37,000 57,000 67,000 Assume the total overhead cost above consists of utilities, supervisory salaries, and maintenance. The breakdown of these c 37,000 machine-hour level of activity is: Utilities (variable) Supervisory salaries (fixed) Maintenance (mixed) Total overhead cost Required 1 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 $234,760 of overhead cost in July was maintenance cost. (Hint: To do this, it may be helpful to determine how much of the $234,760 consisted of utilities and supervisory salaries. Think about the behavior of variable costs.) 2. Using the high-low method, estimate a cost formula for maintenance in the form Y = a +bX. 3. Express the company's total overhead cost in the form Y = a +bX. 4. What total overhead cost would you expect at an activity level of 42,000 machine-hours? $ 154,360 $ 207,960 $ 234,760 Complete this question by entering your answers in the tabs below. Required 2 Y = Utilities cost Supervisory salaries cost Maintenance cost Total overhead cost Express the company's total overhead cost in the form Y = a + bx. Note: Do not round your intermediate calculations. Round the "Variable cost per machine hour" to 2 decimal places. $ 55,500 42,000 56,860 $ 154,360 Required 3 Required 4 Variable Cost per Machine- Hour $ 55,500.00 $ 55,500.00 Fixed Cost $ 0 Next
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