Apartments is a

800-unit

apartment complex. When the apartments are 90% occupied, monthly operating costs total

$222,200.

When occupancy dips to 80%, monthly operating costs fall to

$217,400.

The owner of the apartment complex is worried because many of the apartment residents work at a nearby manufacturing plant that has just announced it will close in three months. The apartment owner fears that occupancy of her apartments will drop to

70%

if residents lose their jobs and move away. Assuming the same relevant range, what can the owner expect her operating costs to be if occupancy falls to

70%?

Question content area bottom

Part 1

Let's begin by determining the formula that is used to calculate the variable cost (slope).

=

Variable cost (slope)

Part 2

Now determine the formula that is used to calculate the fixed cost component.

-

=

Fixed cost

Part 3

Use the high-low method to determine

Pondside's

operating cost equation.

y =

x +

Part 4

Assuming the same relevant range, what should the owner expect her operating costs to be if occupancy falls to

70%?

(Round your answer to the nearest whole dollar.)

The owner should expect her operating costs to be

, if occupancy falls to 70%.