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The Lakeshore Hotel's occupancy-days and custodial supplies expense over the last seven months were as follows: Occupancy- Month Days March 18,000 April 12,500 May 15,000
The Lakeshore Hotel's occupancy-days and custodial supplies expense over the last seven months were as follows: Occupancy- Month Days March 18,000 April 12,500 May 15,000 June 28,500 July 24,000 August 19,000 September 14,500 Custodial Supplies Expense $ 22,500 20,850 20, 250 28,850 27,100 22,750 20,750 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.) Y= + 1. Using the high-low method, estimate a cost formula for custodial supplies expense. (Round the "Variable cost" to 2 decimal places.) Y = 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 13,000 occupancy-days? (Do not round intermediate calculations.) Amount Variable cost Fixed cost Total cost
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