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. Variable cost per room per day 2. Estimate the total fixed operating costs per month. Fixed operating cost per month 3. Assume that the occupancy rate increases to 60% during May. What total operating costs would you expect the company to incur in May? Total expected operating costJuly August September Sales in units 4,090 4,500 5,000 Sales $ 400, 000 $ 450, 000 $ 500, 900 Cost of goods sold 240, 090 270,000 300,000 Gross margin 160, 090 180,000 200, 900 Selling and administrative expenses: Advertising expense 21, 090 21, 000 21, 000 Shipping expense 34 , 090 36,000 38, 000 Salaries and commissions 78,090 84,000 90, 900 Insurance expense 6,090 6,000 6,900 Depreciation expense 15, 090 15, 000 15, 000 Total selling and administrative expenses 154, 090 162, 000 170,000 Operating income $ 6,090 $ 18,000 $ 30,000 Required: 1. Identify each of the company's expenses (including cost of goods sold) as either variable, fixed, or mixed. Expenses Classification Cost of goods sold Advertising expense Shipping expense Salaries and commissions Insurance expense Depreciation expense2. Using the high-low method, separate each mixed expense into variable and fixed elements. State the cost formula for each mixed expense. Variable Cost Fixed Cost Formula per unit Y = per unit per unit Y = per unit3. Redo the company's income statement for September using the contribution format. Skate World Income Statement For the Month Ended September 30 Variable expenses: 0 Fixed expenses: 0