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    Feb 3, 2013, 05:31 PM
    Golden Company’s total overhead cost at various levels of activity are presented belo
    Month Machine-Hours Total Overhead Cost
    March 51,000 $210,620
    April 41,000 $184,420
    May 61,000 $236,820
    June 71,000 $263,020

    Assume that the overhead cost above consists of utilities, supervisory salaries, and maintenance. The breakdown of these costs at the 41,000 machine-hour level of activity is as follows:


    Utilities (variable) $ 61,500
    Supervisory salaries (fixed) 63,000
    Maintenance (mixed) 59,920

    Total overhead cost $ 184,420


    The company wants to break down the maintenance cost into its variable and fixed cost elements.

    Required:
    1.
    Estimate how much of the $263,020 of overhead cost in June was maintenance cost. (Hint: To do this, it may be helpful to first determine how much of the $263,020 consisted of utilities and supervisory salaries. Think about the behavior of variable and fixed costs within the relevant range.) (Do not round intermediate calculations. Omit the "$" sign in your response.)

    Maintenance cost in June $_________________

    2.
    Using the high-low method, estimate a cost formula for maintenance. (Round the "Variable cost per unit" to 2 decimal places and "Fixed cost" to the nearest dollar amount. Omit the "$" sign in your response.)

    Y = $_____ + $_____X

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