Reference no: EM132615079

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

                                    Occupancy-Days                 Expense

March                             9,600                        $15,480

April                                9,800                      15,640

May                                12,700                        18,260

June                                20,500                           24,200

July                                     28,200                     30,360

August                                 19,600                         22,130

September                              15,900                           19,870

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:

Question 1. Using the high-low method, estimate a cost formula for custodial supplies expense. (Round the "Variable cost" to 2 decimal places.)

Y= + X

Question 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 14,800 occupancy-days?

variable cost:

fixed cost:

total cost: