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I can't figure out this part and there is one more part after this. Seaside Apartments is a 1,000-unit apartment complex. When the apartments are
I can't figure out this part and there is one more part after this.
Seaside Apartments is a 1,000-unit apartment complex. When the apartments are 90% occupied, monthly operating costs total $227,500. When occupancy dips to 80%, monthly operating costs fall to $222,000. 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 60% 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 60%? Let's begin by determining the formula that is used to calculate the variable cost (slope). Change in cost Change in volume = Variable cost (slope) Now determine the formula that is used to calculate the fixed cost component. Total operating cost Total variable cost = Fixed cost Use the high-low method to determine Seaside's operating cost equation. y = || x +Step by Step Solution
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