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Need help in number 3 Prairie Motels has a total of 4,700 rooms in its chain of motels located in eastern Canada. On average, 55%
Need help in number 3
Prairie Motels has a total of 4,700 rooms in its chain of motels located in eastern Canada. On average, 55% of the rooms are occupied each day. The company's operating costs are $30 per occupied room per day at this occupancy level, assuming a 30-day month. This $30 contains both variable and fixed cost elements. During April, the occupancy rate dropped to only 30%. A total of $2,129,100 in operating cost was incurred during April. Required: 1. Estimate the variable cost per occupied room per day. (Do not round intermediate calculations and round your final answer to 2 decimal places.) 2. Estimate the total fixed operating costs per month. 3. Assume that the occupancy rate increases to 45% during May. What total operating costs would you expect the company to incur in May? (Do not round intermediate calculations.)Step by Step Solution
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