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The Lakeshore Hotel's occupancy-days and custodial supplies expense over the last seven months were as follows: Custodial Supplies Expense Occupancy- Month Days March 8,100
The Lakeshore Hotel's occupancy-days and custodial supplies expense over the last seven months were as follows: Custodial Supplies Expense Occupancy- Month Days March 8,100 $ 20,590 April 8,300 19,820 May 13,200 25,480 June 20,500 31,750 26,700 37,330 18,600 28,690 15,400 26,510 July August September Occupancy-days are a measure of the overall activity at the hotel. For example, when a guest stays at the hotel for three days, it is counted as three occupancy-days. Required: 1. Using least-squares regression (you may use a spreadsheet to compute the fixed and variable costs), estimate a cost formula for custodial supplies expense. (Round the "Fixed cost" to the nearest dollar amount and "Variable cost" to 2 decimal places.) Y = + X 2. Using the cost formula you derived above, what amount of custodial supplies expense would you expect to be incurred at an occupancy level of 12,800 occupancy-days? (Round the "Fixed cost" to the nearest dollar amount.) Variable cost Fixed cost Total cost $ 0
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