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The Lakeshore Hotel's occupancy-days and custodial supplies expense over the last seven months were as follows:
Month Occupancy Days Custodial Supplies Expense
March 18,300 $16,700
April 12,740 $17,250
May 15,360 $19,000
June 29,400 $23,350
July 25,800 $26,000
August 18,000 $20,750
September 15,100 $20,000
Problem 1: 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. Using the High-Low Method, what is the variable cost portion of the cost equation going to be?
A) $0.366
B) $0.558
C) $1.240
D) $0.813
E) $0.599
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