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The Lakeshore Hotels occupancy-days and custodial supplies expense over the last seven months were as follows: Month Occupancy-Days Custodial Supplies Expense March 18,050 $ 9,800
The Lakeshore Hotels occupancy-days and custodial supplies expense over the last seven months were as follows:
Month | Occupancy-Days | Custodial Supplies Expense | ||
March | 18,050 | $ | 9,800 | |
April | 12,540 | 9,850 | ||
May | 15,060 | 13,700 | ||
June | 28,650 | 16,000 | ||
July | 24,300 | 17,520 | ||
August | 17,000 | 13,250 | ||
September | 14,600 | 12,990 | ||
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.
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 13,200 occupancy-days?
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