The Lakeshore Hotel's occupancy-days and custodial supplies expense over the last seven months were as follows:

Month

Occupancy-Days Custodial Supplies

ExpenseMarch10,800$14,580April11,00014,700May12,30015,780June20,50020,400July29,40025,740August20,40018,990September16,30017,230

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 the high-low method, estimate a cost formula for custodial supplies expense.(Round the "Variable cost" to 2 decimal places.)

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 15,600 occupancy-days?

The following data relating to units shipped and total shipping expense have been assembled by Archer Company, a manufacturer of large, custom-built air-conditioning units for commercial buildings:

MonthUnits

ShippedTotal Shipping

ExpenseJanuary6$ 3,150February62,900March62,800April62,850May31,600June145,600July21,400

Required:1.Estimate a cost formula for shipping expense using the high-low method.

Y= + X

2.Not available in Connect.

3.What factors, other than the number of units shipped, are likely to affect the company's total shipping expense?(You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.)

• Weight of the units shipped
• Distance travelled
• Number of workers used to manufacture the goods shipped
• Size of the units shipped
• Fixed costs to produce the units