The DAC-28155 company's total overhead cost at various levels of activity is presented below: Month March April May Machine Hours 5,000 4,000 6,000 8,000 Total Overhead Cost $ 42,500 $ 34,000 $ 51,000 $ 60,000 0 June 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) Supervisory salaries (considered fixed) Maintenance (considered mixed) Total overhead cost $16,000 $4,000 $14,000 $ 34,000 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 5,000 machine hours? $16,500 $17,300 $16,800 $16,300

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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The DAC-28155 company's total overhead cost at various levels of activity is presented below:
Month
March
April
May
Machine Hours
5,000
4,000
6,000
8,000
Total Overhead Cost
$ 42,500
$ 34,000
$ 51,000
$ 60,000
0
June
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)
Supervisory salaries (considered fixed)
Maintenance (considered mixed)
Total overhead cost
$16,000
$4,000
$14,000
$ 34,000
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 5,000 machine hours?
$16,500
$17,300
$16,800
$16,300
Transcribed Image Text:The DAC-28155 company's total overhead cost at various levels of activity is presented below: Month March April May Machine Hours 5,000 4,000 6,000 8,000 Total Overhead Cost $ 42,500 $ 34,000 $ 51,000 $ 60,000 0 June 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) Supervisory salaries (considered fixed) Maintenance (considered mixed) Total overhead cost $16,000 $4,000 $14,000 $ 34,000 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 5,000 machine hours? $16,500 $17,300 $16,800 $16,300
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