Homework HW Ch 6 Score 036 of 1 pt T161 bookstatic Suppose

Homework: HW Ch 6 Score: 0.36 of 1 pt %) T16-1 (book/static) Suppose Embassy Suites incurs $100,000 of fixed costs each month. Compute the (a) total fixed cost and (b) fixed cost per guest if the hotel has 16,000 guests next month. Compare the fixed Save 3 of 15 (1 complete) I HW Score: 2 42%, 0 36 of 15 pts Question Help * cost per guest at the higher occupancy rate to the fixed cost per guest when only 2,000 guests stay during the month (a) Compute the total fixed cost if the hotel has 16,000 guests next month. Total fixed costs do not react to wide changes in volume; therefore, total fixed costs will still be $100,000 (b) Compute the fixed cost per guest if the hotel has 16,000 guests next month. First, identify the formula to compute the fixed cost per guest, then compute the fixed cost per guest at (1) 16,000 guests and at (2) 2,000 guests. (Round the fixed cost per guest to the nearest cent.) Fixed cost Total fixed cost Number of guests per guest

Solution

Calculate fixed cost per guest :

	Total fixed cost	/	Number of guests	=	Fixed cost per guest
(1)	100000	/	16000	=	$6.25
(2)	100000	/	2000	=	$50