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 fallto $215,480. The owner of the apartment complex is worried because many of the apartment residents work at a nearby manufacturing plant that has just announced it will close in three months.The apartment owner fears that occupancy of her apartments will drop to 55% if residents lose their jobs and move away. Assuming the same relevant range, what can the owner expect heroperating costs to be if occupancy fails to 55%?Let's begin by determining the formula that is used to calculate the variable cost (slope).Change in costChange in volumeVariable cost (slope)Now determine the formula that is used to calculate the foxed cost componentTotal operating costTotal variable costFixed costUse the high-low method to determine Lakeview's operating cost equation$ 57 x $ 179,000Assuming the same relevant range, what should the owner expect her operating costs to be if occupancy falls to 55%7 (Round your answer to the nearest whole dollar)The owner should expect her operating costs to be182.135, if occupancy falls to 55%

Variable cost is the cost that changes with change in the activity of cost driver used. The variable…

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). Change in cost Change in volume Variable cost (slope) Now determine the formula that is used to calculate the foxed cost component Total operating cost Total variable cost Fixed cost Use the high-low method to determine Lakeview's operating cost equation $ 57 x $ 179,000 Assuming the same relevant range, what should the owner expect her operating costs to be if occupancy falls to 55%7 (Round your answer to the nearest whole dollar) The owner should expect her operating costs to be 182.135 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). Change in cost Change in volume Variable cost (slope) Now determine the formula that is used to calculate the foxed cost component Total operating cost Total variable cost Fixed cost Use the high-low method to determine Lakeview's operating cost equation $ 57 x $ 179,000 Assuming the same relevant range, what should the owner expect her operating costs to be if occupancy falls to 55%7 (Round your answer to the nearest whole dollar) The owner should expect her operating costs to be 182.135 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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