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The manager of a well-known Windhoek hotel would like to develop a cost model to predict the future costs of running the hotel. Unfortunately,
The manager of a well-known Windhoek hotel would like to develop a cost model to predict the future costs of running the hotel. Unfortunately, the only data that is available to him is the level of activity (number of guest rooms) in a given month and the total costs incurred in each month. The hotel uses the high-low method and reported a total cost of N$240 per guest room at its lowest activity level, when availability equaled 1000 guest rooms. When availability doubled, at its highest activity level, the total cost per guest room dropped to N$150. Being a new hire at the company, the manager assigns you the task of anticipating the costs that would be incurred in the following month (September). He anticipates that the number of guest rooms that will be available in September will be 2 500. Predict the total costs that will be incurred in the month of September
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