K Lakoside Apartments is a(n) 800-unit apartment complex. When the apartments are 90% occupied, monthly operating costs total $224,360. Whon occupancy dips to 80%, monthly operating costs fall to $219,320. 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 the 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 Use the high-low method to determine Lakeside's operating cost equation. y =

50400 x+ 179000 = Fixed cost Activate Windows Go to Settings to activate Windows.

falls to 60% ? Let's begin by determining the formula that is used to calculate the variable cost (slope) Change in cost Now determine the formula that is used to calculate the fixed cost component. Total operating cost ... Total variable cost = Use the high-low method to determine Lakeside's operating cost equation