Reference no: EM132660310

Question - Great Eastern Inns has a total of 1,700 rooms in its chain of motels located in eastern Canada. On average, 65% of the rooms are occupied each day. The company's operating costs are $38 per occupied room per day at this occupancy level, assuming a 30-day month. This $38 figure contains both variable and fixed cost elements. During February, the occupancy rate dropped to only 50%. A total of $1,156,425 in operating cost was incurred during February.

1. Estimate the variable cost per occupied room per day. (Assume 30 days in a month. Do not round intermediate calculations and round your final answer to 2 decimal places.)

2. Estimate the total fixed operating costs per month.

3. Assume that the occupancy rate increases to 65% during March. What total operating costs would you expect the company to incur during March? (Assume 30 days in a month. Do not round intermediate calculations.)