Using the high-low method, Regency Hotels estimates the total costs of providing room service meals at $12,000 per month, plus 60 percent of room service revenue.

a.What is the contribution margin ratio of providing room service meals?

b.What is the break-even point for room service operations in terms of total room service revenue?

c.What would you expect to be the total cost of providing room service in a month in which room service revenue amounts to $40,000?