Prairie Motels has a total of 4,000 rooms in its chain of motels located in eastern Canada. On average, 80% of the rooms are occupied each day. The company's operating costs are $84 per occupied room per day at this occupancy level, assuming a 30-day month. This $84 contains both variable and fixed cost elements. During April, the occupancy rate dropped to only 40%. A total of $6,000,000 in operating cost was incurred during April.

Required:

1. Estimate the variable cost per occupied room per day.
2. Estimate the total fixed operating costs per month.
3. Assume that the occupancy rate increases to 60% during May. What total operating costs would you