PROBLEM 2 Cost Behavior (20 possible points)
Hotel Majestic is interested in estimating fixed and variable costs so that the company can make more accurate
projections of costs and profits. The hotel is in a resort area that is particularly busy from November through
February. In July and August, however, the hotel has only a 50 percent occupancy rate.
Required:
Classify each of the following costs as fixed (F), variable (V), or mixed (M) with respect to the number of hotel
guests per months:
______	a. Depreciation of the building.
______	b. Salaries of restaurant staff.
______	c. Salaries of administrative staff (hotel manager, desk clerks, accountants, etc.)
______	d. Soap, shampoo, and other toiletries in rooms
______	e. Laundry costs (costs of linens, cleaning products, depreciation of laundry equipment, etc.)
______	f. Food and beverage costs
______	g. Grounds maintenance