Moonlight Motel's Cost Function Is Given As: Y = $50,000

question 82

Multiple Choice

Moonlight Motel's cost function is given as: Y = $50,000 + $7.50X
Where:
Y = annual custodial cost
X = number of guest-days of occupancy
In the current year,Moonlight Motel has 8,000 guest days.In the next year,Moonlight 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 variable custodial cost for next year?

• A)$60,000
• B)$75,000
• C)$125,000
• D)$137,500

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Definitions:

Factor Analysis

Factor analysis is a statistical method used to identify underlying relationships between various variables by grouping them into factors based on their correlations.

Related Items

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Clusters

Groups of similar items or data points that are closer to each other than to other items or points in a dataset.

Annual Percentage Rate

The yearly interest percentage rate that expresses the total cost of borrowing, including fees and charges.