The Western Moon Hotel is a prestigious hotel that caters to both foreign and local visitors. Due to the weakening in the Rand, the number of foreign visitors has increased. The hotel manager wants to see what impact this has had on the housekeeping costs and requested an analysis thereof. The housekeeping departments costs and number of rooms occupied during the previous four months were as follows:

Month Number of rooms occupied

Housekeeping costs

December 210 93 000

January 170 81 000

February 110 63 000

March 140 72 000

Required:

a) Use the high-low method to separate the housekeeping costs into the variable and fixed components.

b) What would the expected total housekeeping costs be if 240 rooms are occupied during a specific period?