Applying the HIgh$-$Low Method; Predlcting Cost $[$LO$2-$ CC$9]$

CHECK FIGURE

$(1)$a $$103,500$ per month

$(1)$b $$29\mathrm{.}58$ per room$-$day

West Coast Hotel has $150$ rooms. The occupancy rate varies between $50\%$ and $90\%$ per month, but the average occupancy rate is generally $80\%.$ In other words, on average, $80\%$ of the hotel's rooms are occupied by guests. At this level of occupancy, the hotel's operating costs are $$70$ per occupied room per day, assuming a $30-$day month. This $$70$ figure contains both variable and fixed cos elements. This average cost figure drops to $$65$ when the occupancy rate is $90\%($typically during the months of July and August$).$

During June, the hotel's occupancy rate was only $50\%$ and a total of $$210,000$ in operating costs was incurred during the month.

Required:

Using the high$-$low method, estimate

a$.$ The variable cost per occupied bed on a daily basis.

b$.$ The total fixed operating costs per month.

Assume an occupancy rate of $70\%$ per month. What amount of total operating cost would you expect the hotel to incur?