B BrewerSce PPT Ch07-X Connect y D Chapter 6 ezto.mheducation.com/hm.tpx?-=0.1 3

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B BrewerSce PPT Ch07-X Connect y D Chapter 6 ezto.mheducation.com/hm.tpx?-=0.1 3 1 1785656 1893038_1 528 1 43028857 ppsBlackboard LeamC Course Information Learning My Cours Edit My Resume -M. D The Lakeshore Hotel's occupancy-days and custodial supplies expense over the last seven months w ollows Custodial S Month March April May June July August September 10,500 10,700 2,400 20,500 29,100 20,200 16,200 Expense 20,200 20,320 21,640 26,200 31,360 24,670 22,970 Occupancy days are a measure of the overall activity at the hotel. For example, when a guest stays at the hotel for three days, it is counted as three occupancy-days Required: 1. Using the high-low method, estimate a cost formula for custodial supplies expense. (Round the Variable cost" to 2 decimal places 2. Using the cost formula you derived abov e what amount of custodial supplies expense would you expect Variable cost Fled cost Total cost Ask me ?

Explanation / Answer

1) variable cost per occupancy days = Change in cost/Change in occupancy days

= (31360-20200)/(29100-10500)

Variable cost per occupancy days = 0.60 per occupancy days

Fixed cost = 31360-(29100*0.60) = 13900

Y = a+bx

Y = 13900+0.60X

2) Calculate total cost :

Variable cost (0.60*15400) 9240 Fixed cost 13900 Total cost 23140

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