EXERCISE 6-1 Applying the High-Low Method; Predicting Cost [LO2 - CC9] The Lakeshore Hotel's occupancy-days and custodial supplies expense over the last seven months were as follows: Custodial Supplies Expense Month Occupancy-Days March 18,000 $22,500 April 12,500 19.250 May 15,000 20.900 June h 28,500 28,850 July 24,000 27,100 August 19,000 22,750 September 14,500 20,750 Occupancy-days are a measure of the overall activity at the hotel. For example, when a guest stays at the hotel for three days, it is counted as three occupancy-days. CHAPTER 6: COST BEHAVIOUR: ANA Required: 1. Using the high-low method, estimate a cost formula for custodial supplies expense. 2. Using the cost formula you derived above, what amount of custodial supplies expense would you expect to be incurred at an occupancy level of 13,000 occupancy-days