PROBLEM 4-6. Account Analysis, High-Low, Contribution Margin Information '^p

on occupancy and costs at the New Light Hotel for April, May, and June are indicated

below:

April May June

Occupancy 1,500 1,650 1,800

Day manager salary $ 4,200 $ 4,200 $ 4,200

Night manager salary 3,700 3,700 3,700

Cleaning staff 15,300 15,600 15,900

Depreciation 12,000 12,000 12,000

Complimentary continental breakfast:

food and beverages 4,600 5,300 5,800

Total $39,800 $40,800 $41,600

Required

a. Calculate the fixed costs per month and the variable cost per occupied room using

account analysis for April.

b. Calculate the fixed costs per month and the variable cost per occupied room using

the high-low method.

c. Average room rates are $110 per night. What is the contribution margin per occupied

room? In answering this question, use your variable cost estimate from Part b.