Answer Happy

The Lakeshore Hotel's occupancy-days and custodial supplies expense over the last seven months were as follows: Custodial Supplies Expense $17,540 Month March April May June July August September Occupancy- Days 18,800 13,140 15,960 30,900 28,800 20,000 16,100 17,680 19,450 24,750 30,560 23,050 21,020 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. (Round the "Fixed cost" to the nearest dollar amount and "Variable cost" to 2 decimal places.)
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 15,200 occupancy-days? (In your computations, round "Variable cost per unit" to 2 decimal places and final answers to the nearest dollar amount.) Variable cost Fixed cost Total cost Amount