Rooter\'s Cleaning Services provided data concerning the costs incurred to clean
ID: 2621457 • Letter: R
Question
Rooter's Cleaning Services provided data concerning the costs incurred to clean hotel rooms for which hotel customers pay $150 per night. Data for the past 7 months are as follows: How much are estimate variable costs using the high low method? Month # of Rooms Cleaned Cleaning Cost JAN 250 $6,450.00 FEB 160 $ 40,160.00 MAR 200 $5,100.00 APR 150 $4,100.00 lowest activity MAY 285 $6,760.00 highest activity JUN 170 $4,200.00 JUL 260 $ 6,530.00 variable cost per unit is $19.70 Now what am I supposed to do?
Explanation / Answer
January
February
March
April
May
June
July
# of rooms cleaned
250
160
200
150
270
170
260
Cleaning Cost
$6,450
$4,060
$5,100
$4,100
$6,530
$4,200
$6,640
Use the high low method to determine the cost of cleaning at 175 rooms.
High and low data points = April and May
VC per unit = ($6,760.00 - $4,100) / (270
January
February
March
April
May
June
July
# of rooms cleaned
250
160
200
150
270
170
260
Cleaning Cost
$6,450
$4,060
$5,100
$4,100
$6,530
$4,200
$6,640
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