Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Pondview Apartments is a 750-unit apartment complex. When the apartments are 90% occupied, monthly operating costs total $215,150. When occupancy dips to 80%, monthly operating

image text in transcribed
Pondview Apartments is a 750-unit apartment complex. When the apartments are 90% occupied, monthly operating costs total $215,150. When occupancy dips to 80%, monthly operating costs fall to $210,800. 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 70% 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 70% ? Lefs begin by determining the formula that is used to calculate the variable cost (slope). Now determine the formula that is used to calculate the fxed cost component Use the high-low method to delermine Pondvews operating cost equation. Assurring the same relevant ranpe, What should the owner expect her operating costs to be if occupancy falls to 70% ? (Round your answer to the nearest whole dollar) The owner should expect her operating costs to be if occupancy falls to 70%

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing And Assurance Services With ACL CD

Authors: McGraw Hill

1st Edition

1259071200, 978-1259071201

More Books

Students also viewed these Accounting questions