Great Eastern Inns has a total of 2,800 rooms in its chain of motels located in eastern Canada. On average, 65% of the rooms are occupied each day. The companys operating costs are $15 per occupied room per day at this occupancy level, assuming a 30-day month. This $15 figure contains both variable and fixed cost elements. During February, the occupancy rate dropped to only 40%. A total of $598,500 in operating cost was incurred during February.

Required:

1. Estimate the variable cost per occupied room per day. (Assume 30 days in a month. Do not round intermediate calculations and round your final answer to 2 decimal places.)

Variable cost

per room per day

2. Estimate the total fixed operating costs per month.

Fixed operating cost

per month

3. Assume that the occupancy rate increases to 55% during March. What total operating costs would you expect the company to incur during March? (Assume 30 days in a month. Do not round intermediate calculations.)

Total expected cost