Resort Inns, Inc., has a total of 2,000 rooms in its nationwide chain of motels. On average, 70% of the rooms are occupied each day. The company’s operating costs are $21 per occupied room per day at this occupancy level, assuming a 30-day month. This $21 figure contains both variable and fixed cost elements. During October, the occupancy rate dropped to only 45%. A total of $792,000 in operating cost was incurred during October.

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 60% during November. What total operating costs would you expect the company to incur duringNovember?