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% ?