Lakeview Apartments is an 800-unit apartment complex. When the apartments are 90% occupied, monthly operating costs total $220,040. When occupancy dips to 80%, monthly operating costs fall to $215,480. The owner of the apartment complex is worried because many of the apartment residents work at a nearby manufacturing plant that has just announced it will close in three months. The apartment owner fears that occupancy of her apartments will drop to 55% if residents lose their jobs and move away. Assuming the same relevant range, what can the owner expect her operating costs to be if occupancy falls to 55%? Let's begin by determining the formula that is used to calculate the variable cost (slope). = Variable cost (slope) Now determine the formula that is used to calculate the fixed cost component. Fixed cost Use the high-low method to determine Lakeview's operating cost equation. y = Assuming the same relevant range, what should the owner expect her operating costs to be if occupancy falls to 55% ? (Round your answer to the nearest whole dollar.) The owner should expect her operating costs to be if occupancy falls to 55%.

Lakeview Apartments is an 800-unit apartment complex. When the apartments are 90% occupied, monthly operating costs total $220,040. When occupancy dips to 80%, monthly operating costs fall to $215,480. The owner of the apartment complex is worried because many of the apartment residents work at a nearby manufacturing plant that has just announced it will close in three months. The apartment owner fears that occupancy of her apartments will drop to 55% if residents lose their jobs and move away. Assuming the same relevant range, what can the owner expect her operating costs to be if occupancy falls to 55%? Let's begin by determining the formula that is used to calculate the variable cost (slope). = Variable cost (slope) Now determine the formula that is used to calculate the fixed cost component. Fixed cost Use the high-low method to determine Lakeview's operating cost equation. y = Assuming the same relevant range, what should the owner expect her operating costs to be if occupancy falls to 55% ? (Round your answer to the nearest whole dollar.) The owner should expect her operating costs to be if occupancy falls to 55%.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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