. Cliff Manor Inn Motel's cost function is given as: Y = $100,000 + $7.50X...
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Accounting
. Cliff Manor Inn Motel's cost function is given as:
Y = $100,000 + $7.50X
Where: Y = annual custodial cost
X = number of guest-days of occupancy
In the current year, Cliff Manor Inn Motel has 6,500 guest days. In the next year, Cliff Manor Inn Motel expects an occupancy level of 7,000 guest days. (All costs next year will remain in the same relevant range as the current year.) What is the expected fixed custodial cost for next year? A) $7.50 B) $75,000 C) $100,000 D) $125,000
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