Estimate a cost formula for custodial supplies expense

Reference no: EM131896452

Problem

The Lakeshore Hotel's guest-days of occupancy and custodial supplies expense over the last seven months were:

Month	Guest-Days of Occupancy	Custodial Supplies Expense
March	8,000	12,000
April	7,500	11,700
May	10,000	13,200
June	11,500	14,100
July	13,500	15,300
August	12,500	14,700
September	10,000	13,200

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.

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 expense would you expect to be incurred at an occupancy level of 11,500 guest-days?

3. Prepare a scattergraph using the data given above.

Reference no: EM131896452

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