1.

The Lakeshore Hotel's occupancy-days and custodial supplies expense over the last seven months were as follows: Custodial Supplies Month Occu pancy-Days Expense March 10,200 $ 17,540 April 10,400 17,680 May 12,500 19,450 June 20.500 24,750 July 28,800 30,560 August 20,000 23,050 September 16,100 21,020 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 above. what amount of custodial supplies expense would you expect to be incurred at an occupancy level of 15,200 occupancy-days? Variable cost Fixed cost Total cost Data for Hermann Corporation are shown below: Per Percentage Unit of Sales Sales price $90 100 Less: Variable 70 expenses 63 Contribution $27 30 margin Fixed expenses are $40,000 per month, and the company is selling 2,000 units per month. Required: 1- The marketing manager argues that a $4,000 increase in the monthly a. advertising budget would increase monthly sales by $9,000. Show the effect of this change on the net income? Complete the table given below to answer the question. (Negative amounts should be indicated by a minus sign.) Sales With Current Additional Sales Advertising Difference Budget Sales Less: Variable expenses Contribution margin Less: Fixed expenses Net income (loss) "Based on your calculations should the change be made? Yes No 2- Refer to the original data. Management is considering using higher-quality a. components that would increase the variable cost by $2.00 per unit. The marketing manager believes the higher-quality product would increase sales by 10% per month. Calculate the change in contribution margin? Change in contribution margin "Should the higher-quality components be used