Solution-What total operating costs would you expect the

What total operating costs would you expect the company

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Question - Great Lodge has a total of 3,400 rooms in its chain of motels located in eastern Canada. On average, 55% of the rooms are occupied each day. The company's operating costs are $39 per occupied room per day at this occupancy level, assuming a 30-day month. This $39 figure contains both variable and fixed cost elements. During February, the occupancy rate dropped to only 40%. A total of $2,013,480 in operating cost was incurred during February.

Required -

1. Estimate the variable cost per occupied room per day.

2. Estimate the total fixed operating costs per month.

3. Assume that the occupancy rate increases to 55% during March. What total operating costs would you expect the company to incur during March?

Reference no: EM132981911

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What total operating costs would you expect the company

Reference no: EM132981911

Reference no: EM132981911

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