## Total overhead costs at various levels of activity are given below: Mo

Total overhead costs at various levels of activity are given below: Month DL Hours Total Ohd Costs March 80,000 \$412,500 April 90,000 410,000 May 100,000 585,000 June 120,000 582,500Assume that overhead costs consist of rent, indirect materials, utilities, supervisory salaries, and maintenance. The proportion of these costs at the 80,000 direct labor-hour level of activity is: Rent (F) \$ 20,500 Indirect materials (V) 160,000 Supervisory salaries (F) 30,000 Utilities (V) 80,000 Maintenance (M) 122,000 Total \$412,500(F) = Fixed; (V) = Variable; (M) = MixedThe company wants to break down the maintenance cost into its variable and fixed cost components.1. By means of the high-low method, determine the cost formula for maintenance.2. Express the company’s total overhead cost in linear equation form.3. What total overhead cost would you expect to incur at an operating activity of 75,000 direct labor hours? At 115,000 direct labor hours?

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## Total overhead costs at various levels of activity are given below: Mo

Total overhead costs at various levels of activity are given below: Month DL Hours Total Ohd Costs March 80,000 \$412,500 April 90,000 410,000 May 100,000 585,000 June 120,000 582,500Assume that overhead costs consist of rent, indirect materials, utilities, supervisory salaries, and maintenance. The proportion of these costs at the 80,000 direct labor-hour level of activity is: Rent (F) \$ 20,500 Indirect materials (V) 160,000 Supervisory salaries (F) 30,000 Utilities (V) 80,000 Maintenance (M) 122,000 Total \$412,500(F) = Fixed; (V) = Variable; (M) = MixedThe company wants to break down the maintenance cost into its variable and fixed cost components.1. By means of the high-low method, determine the cost formula for maintenance.2. Express the company’s total overhead cost in linear equation form.3. What total overhead cost would you expect to incur at an operating activity of 75,000 direct labor hours? At 115,000 direct labor hours?

## 3 Simple steps to get your paper done

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