The ABD Hotel's guest-days of occupancy and custodial supplies expense over the last seven months were: Custodial Guest Days Supplies Expense 375,000 Month Оссирancy 4,000 March April May June July August September 6,500 412,500 8,000 525,000 10,500 600,000 12,000 675,000 9,000 537,500 7,500 487,500 Guest-days is a measure of the overall activity at the hotel. For example, a guest who stays at the hotel for three days is counted as three guest-days. Required: 1 Using the high-low method, estimate a cost formula for custodial supplies expense. 2 Using the cost formula you derived above, what amount of custodial supplies would you expect to be incurred at an occupancy level of 11,000 guest-days?
The ABD Hotel's guest-days of occupancy and custodial supplies expense over the last seven months were: Custodial Guest Days Supplies Expense 375,000 Month Оссирancy 4,000 March April May June July August September 6,500 412,500 8,000 525,000 10,500 600,000 12,000 675,000 9,000 537,500 7,500 487,500 Guest-days is a measure of the overall activity at the hotel. For example, a guest who stays at the hotel for three days is counted as three guest-days. Required: 1 Using the high-low method, estimate a cost formula for custodial supplies expense. 2 Using the cost formula you derived above, what amount of custodial supplies would you expect to be incurred at an occupancy level of 11,000 guest-days?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:The ABD Hotel's guest-days ofoccupancy and custodial supplies expense over the last seven
|months were:
Custodial
Guest Days
Supplies
Month
Expense
375,000
Оссирancy
4,000
6,500
8,000
10,500
March
April
May
June
July
August
September
412,500
525,000
600,000
675,000
537,500
487,500
12,000
9,000
7,500
Guest-days is a measure of the overall activity at the hotel. For example, a guest who stays
at the hotel for three days is counted as three guest-days.
Required:
Using the high-low method, estimate a cost formula for custodial supplies expense.
Using the cost formula you derived above, what amount of custodial supplies would you
expect to be incurred at an occupancy level of 11,000 guest-days?
2
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