(Solved by Humans)-PROBLEM 3–15 High–Low Method; Predicting Cost [LO1, LO2] Prince Company’s total overhead costs at...

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  PROBLEM 3–15 High–Low Method; Predicting Cost [LO1, LO2] Prince Company’s total overhead costs at various levels of activity are presented below:       Month Direct Labour- Hours Total Overhead Cost September . . . . . . . . . . . . . . . . .   . 100,000 $388,000 October . . . . . . . . . . . . . . . . . . . .   . 80,000 $340,400 November . . . . . . . . . . . . . . . . . .   . 135,000 $485,600 December . . . . . . . . . . . . . . . . . .   . 140,000 $483,200   Assume that the overhead cost above consists of utilities, supervisory salaries, depreciation, and maintenance. The breakdown of these costs at the 80,000-machine-hour level of activity in October is as follows:   Utilities (variable) . . . . . . . . . . . . . . . . . . . . . . . . . . . $104,000 Supervisory  salaries   and depreciation (fixed). . . . . . . . . . . . . . . . . . 120,000 Maintenance (mixed) . . . . . . . . . . . . . . . . . . . . . . .   116,400 Total overhead cost . . . . . . . . . . . . . . . . . . . . . . . . . $340,400 The company wants to break down the maintenance cost into its variable and fixed cost elements. Required: 1.              Estimate how much of the $483,200 of overhead cost in December was maintenance cost. (Hint: To do this, first determine how much of the $483,200 consisted of utilities and su- pervisory salaries. Think about the behaviour of variable and fixed costs within the rele- vant range.) 2.              Using the high–low method, estimate a cost formula for maintenance. 3.              Express the company’s total overhead cost in the form Y = a + bX. 4.              What total overhead cost would you expect to be incurred at an activity level of 90,000 machine-hours?