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Yewston Hotel bases its budgets on guest-days. The hotel\'s static budget for Ap

ID: 2380429 • Letter: Y

Question

Yewston Hotel bases its budgets on guest-days. The hotel's static budget for April appears below:

24,940  

32,480  

30,450  

40,890  

$73,370  

The total variable cost at the activity level of 4,100 guest-days per month should be:

   Budgeted number of guest-days 2,900      Budgeted variable costs:       Supplies (@$2.60 per guest-day) $7,540         Laundry (@$8.60 per guest-day)

24,940  

   Total variable cost

32,480  

   Budgeted fixed costs:       Wages and salaries 10,440         Occupancy costs

30,450  

   Total fixed cost

40,890  

   Total cost

$73,370  

Explanation / Answer

Total variable cost for 4100 guest-days = 2.6*4100 + 8.6*4100

=10660+35260

=45920