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Prairie Motels has a total of 1,400 rooms in its chain of motels located in eastern Canada. On average, 60% of the rooms are occupied
Prairie Motels has a total of 1,400 rooms in its chain of motels located in eastern Canada. On average, 60% of the rooms are occupied each day. The company's operating costs are $25 per occupied room per day at this occupancy level, assuming a 30-day month. This $25 contains both variable and fixed cost elements. During April, the occupancy rate dropped to only 35%. A total of $537,600 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 50% during May. What total operating costs would you expect the company to incur in May? (Do not round intermediate calculations.)
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