Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

West Coast Hotel has 1 5 0 rooms. The occupancy rate varies between 5 0 % and 9 0 % per month, but the average

West Coast Hotel has 150 rooms. The occupancy rate varies between 50% and 90% per month, but the average occupancy rate is generally 80%. In other words, on average, 80% of the hotels rooms are occupied by guests. At this level of occupancy, the hotels operating costs are $90 per occupied room per day, assuming a 30-day month. This $90 figure contains both variable and fixed cost elements. This average cost figure drops to $85 when the occupancy rate is 90%(typically during the months of July and August).
During June, the hotels occupancy rate was only 50% and a total of $273,000 in operating costs was incurred during the month.
Required:
1-a. Using the high-low method, estimate the variable cost per occupied bed on a daily basis. (Round your answer to 2 decimal places.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

Answer To estimate the variable cost per occupied bed on a daily basis using the highlow method we n... blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Managerial Accounting

Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer

13th Edition

978-0073379616, 73379611, 978-0697789938

More Books

Students also viewed these Accounting questions