Fitzgerald, a large hotel chain, has been using activity-based costing to determine the cost of a night's stay at their hotels. (Click the icon to view additional information.) Dawn gathers information for weekly inspection costs, rooms inspected, and inspection labor-hours as follows: (Click the icon to view the information gathered.) Read the reniliramente Requirement 1. Explain why number of units inspected and inspection labor-hours are plausible cost drivers of inspection costs. The number of rooms inspected is likely related to supplies used, which is because costs would significant component of inspection costs. Inspection labor-hours are a plausible cost driver if labor hours a function of how much time the inspectors spend on each room. per room inspected, Data table Rooms Week Inspection Inspected Labor-Hours Inspection Costs Week 1 190 60 $ 1,700 Week 2 258 104 2,460 Week 3 271 76 2,210 Week 4 367 117 2,750 Week 5 130 42 1,360 Week 6 175 55 1,650 Week 7 188 102 1,680 Week 8 261 121 2,160 Dawn runs regressions on each of the possible cost drivers and estimates these cost functions: Inspection Costs = $578.18+ ($6.17 x Number of rooms inspected) Inspection Costs $986.12 + ($11.94 x Inspection labor-hours) More info - One of the activities, "Inspection," occurs after a customer has checked out of a hotel room. Fitzgerald inspects every 10th room and has been using "number of rooms inspected" as the cost driver for inspection costs. A significant component of inspection costs is the cost of the supplies used in each inspection. Dawn Bains, the chief inspector, is wondering whether inspection labor-hours might be a better cost driver for inspection costs. Print Done