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

Question

Mongelli 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: Activity level Variable overhead costs: 90 guests $ 234 315 Supplies Laundryy Fixed overhead costs: Utilities Salaries and wages Depreciation 4,290 2,680 $7,739 Total overhead cost 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 99 guests? Multiple Choice

Explanation / Answer

Option - A .........7793.90

Variable overhead cost = ( 234 + 315) / 90 * 99 = 603.9

Fixed Overhead cost = Remain same = 220 + 4290 + 2680 = 7190

Total cost = 7190 + 603.90 = 7793.90 ......................final answer.

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