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Question 2 Lotus company incurred the following maintenance costs during the past 9 months : Table 1 Months Room occupancy Cost $ 1 120 4560
Question 2 Lotus company incurred the following maintenance costs during the past 9 months : Table 1 Months Room occupancy Cost $ 1 120 4560 2 210 9780 3 50 2920 4 160 8280 430 20320 6 80 3920 325 17140 8 143 5500 570 22400 REQUIRED Part 1. A. Use the data on Table 1 , estimate the variable and fixed cost of the company using the high and low method B. Develop a cost function for the company. C. Estimate the maintenance cost if 630 rooms are occupied in October Part 2 1. Use a scatter graph and the two points that seem to best represent the relationship between cost and activity levels of 80 and 325 machine hours. Use these two points , estimate the variable cost and the fixed cost [ components of maintenance costs] 2. Develop a cost function that the company can use to estimate maintenance cost at different volume levels of occupancy 3. Estimate maintenance costs for December if the company expects 600 rooms to be occupied
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