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?
Chapter7: Budgeting
Section: Chapter Questions
Problem 12EB: Drainee purchases direct materials each month. Its payment history shows that 65% is paid in the...
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