Determine cost behavior and predict operating costs (Learning Objective 4)

Bayview Apartments is a 500 -unit apartment complex. When the apartments are \(90 \%\) occupied, monthly operating costs total \(\$ 200,000\). When occupancy dips to \(80 \%\), monthly operating costs fall to \(\$ 197,000\). The owner of the apartment complex is worried because many of the apartment residents work at a nearby manufacturing plant that has just announced that it will close in three months. The apartment owner fears that occupancy of his apartments will drop to \(60 \%\) if residents lose their jobs and move away. Assuming the same relevant range, what can the owner expect his operating costs to be if occupancy falls to \(60 \%\) ?