Sullivan Family Inn is a bed and breakfast establishment in a converted 100-year

Question

Sullivan Family Inn is a bed and breakfast establishment in a converted 100-year-old mansion. The Inn's guests appreciate its gourmet breakfasts and individually decorated rooms. The Inn's overhead budget for the most recent month appears below: The Inn's variable overhead costs are driven by the number of guests. What would be the total budgeted overhead cost for a month if the activity level is 53 guests? Variable cost per guest for supplies = $148.20 ÷ 57 guests = $2.60 per guest Variable cost per guest for laundry = $216.60 ÷ 57 guests = $3.80 per guest

A. $7,159.20

B. $6,680.60

C. $7,184.80

D. $26,154.40

57 guests Activity level Variable overhead costs Supplies Laundry S 148.20 216.60 Fixed overhead costs: Utilities Salaries and wages Depreciation 170.00 4,310.00 2,340.00 $7.184 80 Total overhead cost

Explanation / Answer

Sullivan Family Inn All Amounts in $ Budgeted Overhead Costs for an Activity Level of 53 guests Variable Costs Supplies 137.8 Laundry 201.4 Fixed Costs Utilities 170 Salaries and Wages 4310 Depreciation 2340 Total Costs 7159.2

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