Nova Company's total overhead cost at various levels of activity are presented below: Month Machine Hours Overhead Cost April 45,000 $167,500 May 36,000 $145,180 June 54,000 $189,820 July 63,000 $212,140 Assume that the total overhead cost above consists of utilities, supervisory salaries, and maintenance. The breakdown of these costs at the 36,000 machine-hour level of activity is: Utilities (variable) $46,800 Supervisory salaries (fixed) 43,000 Maintenance (mixed) Total overhead cost 55,380 $145,180 Nova Company's management wants to break down the maintenance cost into its variable and fixed cost elements. Estimate how much of the $212,140 of overhead cost in July was maintenance cost.
Nova Company's total overhead cost at various levels of activity are presented below: Month Machine Hours Overhead Cost April 45,000 $167,500 May 36,000 $145,180 June 54,000 $189,820 July 63,000 $212,140 Assume that the total overhead cost above consists of utilities, supervisory salaries, and maintenance. The breakdown of these costs at the 36,000 machine-hour level of activity is: Utilities (variable) $46,800 Supervisory salaries (fixed) 43,000 Maintenance (mixed) Total overhead cost 55,380 $145,180 Nova Company's management wants to break down the maintenance cost into its variable and fixed cost elements. Estimate how much of the $212,140 of overhead cost in July was maintenance cost.
Chapter6: Activity-based, Variable, And Absorption Costing
Section: Chapter Questions
Problem 8MC: A company calculated the predetermined overhead based on an estimated overhead of $70.000, and the...
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