Bayside Apartments is a 900-unit apartment complex. When the apartments are 90% occupied, monthly operating costs...
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Bayside Apartments is a 900-unit apartment complex. When the apartments are 90% occupied, monthly operating costs total $219,550. When occupancy dips to 80%, monthly operating costs fall to $214,600 The owner of the apartment complex is worried because many of the apartment residents work at a nearby manufacturing plant that has just announced it will close in three months. The apartment owner fears that occupancy of her apartments will drop to 65% if residents lose their jobs and move away. Assuming the same relevant range, what can the owner expect her operating costs to be if occupancy falls to 65%? Let's begin by determining the formula that is used to calculate the variable cost (slope). = Variable cost (slope) Now determine the formula that is used to calculate the fixed cost component. Fixed cost Use the high-low method to determine Bayside's operating cost equation. y= x+ Assuming the same relevant range, what should the owner expect her operating costs to be if occupancy falls to 65%? (Round your answer to the nearest whole dollar) The owner should expect her operating costs to be if occupancy falls to 65% Bayside Apartments is a 900-unit apartment complex. When the apartments are 90% occupied, monthly operating costs total $219,550. When occupancy dips to 80%, monthly operating costs fall to $214,600 The owner of the apartment complex is worried because many of the apartment residents work at a nearby manufacturing plant that has just announced it will close in three months. The apartment owner fears that occupancy of her apartments will drop to 65% if residents lose their jobs and move away. Assuming the same relevant range, what can the owner expect her operating costs to be if occupancy falls to 65%? Let's begin by determining the formula that is used to calculate the variable cost (slope). = Variable cost (slope) Now determine the formula that is used to calculate the fixed cost component. Fixed cost Use the high-low method to determine Bayside's operating cost equation. y= x+ Assuming the same relevant range, what should the owner expect her operating costs to be if occupancy falls to 65%? (Round your answer to the nearest whole dollar) The owner should expect her operating costs to be if occupancy falls to 65%
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Formulas for Calculating Cost Behavior Variable Cost Slope There are two ways to find the variable c... View the full answer
Related Book For
Managerial Accounting
ISBN: 978-0176223311
1st Canadian Edition
Authors: Karen Wilken Braun, Wendy Tietz, Walter Harrison, Rhonda Pyp
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