[Don_M]

ABC Co.'s total overhead costs at various levels of activities (all within the same relevant range) are presented below:

Month Flying Hours Total Overhead Costs
September 8,000 $ 92,000
October 12,000 $ 106,000
November 16,000 $ 120,000
December 4,000 $ 78,000



Assume that the total overhead costs above consist of managerial salaries, maintenance and utilities.
The breakdown of these costs at the 4,000 flying-hour level of activity is:
Managerial salaries (fixed) $

$25,000
Maintenance (mixed) $48,200
Utilities (variable) $4,800
Total overhead costs
$ 78,000



ABC Co.'s management wants to breakdown the maintenance cost into its variable and fixed cost elements.

Required:

1) Estimate how much of the $120,000 of overhead cost in November was maintenance cost.

2) Using the high-low method, estimate a cost formula for maintenance.

3) Express the company's total overhead costs in the linear equation form Y=aX+b.

4) What total overhead costs would be expected to be incurred at an operating activity level of 11,000 flying-hours?

[smoothy]

Read me first - Expectations for the Homework Help board

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[Don_M]

Bro this was not a homework question :)

It was a question from the book that I was working on for my test but didn't know how to solve it and couldn't ask my prof seeing that in my country ( Friday & Saturday ) is a weekend :)



I got it solved anyway