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Question 1 (10 marks) Ricks Motel has the following monthly costs in the first five months of 2019: Month Rooms Rented Costs January 150 $20,250
Question 1 (10 marks)
Ricks Motel has the following monthly costs in the first five months of 2019:
Month Rooms Rented Costs
January 150 $20,250
February 160 21,000
March 130 18,750
April 144 19,800
May 170 21,750
Instructions
a. Identify the fixed and variable cost elements using the high-low method.
b. The hotel management is doing a projection for June 2019. How many rooms should be rented out in order to break even, if the charge is $150 per room rented?
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