FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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The Lakeshore Hotel's occupancy-days and custodial supplies expense over the last seven months were as follows:
Occupancy-
Days
10, 200
9,000
12,500
20,500
28,800
20,000
16,100
Custodial
Supplies
Expense
$ 17,540
15,750
19,450
24,750
30,560
23,050
21,020
Month
March
April
May
June
July
August
September
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 least-squares regression (you may use a spreadsheet to compute the fixed and variable costs), estimate a cost formula for
custodial supplies expense. (Round the "Fixed cost" to the nearest dollar amount and "Variable cost" to 2 decimal places.)
|x
Y =
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? (Round the "Fixed cost" to the nearest dollar amount.)
Variable cost
Fixed cost
Total cost
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Transcribed Image Text:The Lakeshore Hotel's occupancy-days and custodial supplies expense over the last seven months were as follows: Occupancy- Days 10, 200 9,000 12,500 20,500 28,800 20,000 16,100 Custodial Supplies Expense $ 17,540 15,750 19,450 24,750 30,560 23,050 21,020 Month March April May June July August September 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 least-squares regression (you may use a spreadsheet to compute the fixed and variable costs), estimate a cost formula for custodial supplies expense. (Round the "Fixed cost" to the nearest dollar amount and "Variable cost" to 2 decimal places.) |x Y = 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? (Round the "Fixed cost" to the nearest dollar amount.) Variable cost Fixed cost Total cost
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