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Ostler Hotel bases its budgets on guest-days. The hotel's static budget for April appears below:
| | | |
| Budgeted number of guest-days | | 8,700 |
| Budgeted variable overhead costs: | | |
| Supplies (@$7.00 per guest-day) | $ | 60,900 |
| Laundry (@$3.80 per guest-day) | | 33,060 |
| Total variable overhead cost | | 93,960 |
| Budgeted fixed overhead costs: | | |
| Wages and salaries | | 80,910 |
| Occupancy costs | | 38,280 |
| Total fixed overhead cost | | 119,190 |
| Total budgeted overhead cost | $ | 213,150 |
| |
The total overhead cost at an activity level of 9,700 guest-days per month should be:
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