Question: Sheboygan Motel's cost function is given as: Y = $120,000 + $2.50X Where: Y = annual custodial cost X = number of guest-days of occupancy

Sheboygan Motel's cost function is given as:

Y = $120,000 + $2.50X Where: Y = annual custodial cost X = number of guest-days of occupancy

In the current year, Sheboygan Motel has 8,000 guest days. In the next year, Sheboygan Motel expects an occupancy level of 10,000 guest days. (All costs next year will remain in the same relevant range as the current year.) What is the expected total custodial cost for next year? Select one: A. $125,000 B. $120,000 C. $37,000 D. $145,000

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