Question
Assume that in a specific month your hotel anticipates 9,500 guests. Also, assume that your hotel pays $6,000 per month to lease its telephone system.
Assume that in a specific month your hotel anticipates 9,500 guests. Also, assume that your hotel pays $6,000 per month to lease its telephone system. In addition, assume that from historical records the average guest staying in your hotel makes one local call and one long-distance telephone call. The cost, to your hotel of each call averages $0.50 in access fees or a total of $1.00 per guest (2 calls x $0.50 per call = $1.00). Using the mixed cost formula, your hotels telephone bill for the month could be:
A. -$15,500 B. $15,500 C. -$16,500 D. $16,500
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