Mandalay Hotel Bases Its Budgets on Guest-Days -The Total Overhead Cost at an Activity Level of 5,200

question 109

Multiple Choice

Mandalay Hotel bases its budgets on guest-days. The hotel's static budget for August appears below:
$\begin{array} { | l | r | } \hline \text { Budgeted number of guest-days } & 4,300 \\\hline \text { Budgeted variable overhead costs: } & \\\hline \text { Supplies (@\$.60 per guest-day) } & \$ 41,280 \\\hline \text { Laundry ( @9.40 per guest-day) } & \underline{ 4 0 , 4 2 0 } \\\hline \text { Total variable overhead cost } & 81,700 \\\hline \text { Budgeted fixed overhead costs: } & \\\hline \text { Wages and salaries } & 57,190 \\\hline \text { Occupancy costs } & \underline { 52,030 } \\\hline \text { Total fixed overhead cost } & 109,220 \\\hline \text { Total budgeted overhead cost } & \$ 190,920 \\\hline\end{array}$

-The total overhead cost at an activity level of 5,200 guest-days per month should be:

• A) $208,020
• B) $230,880
• C) $209,940
• D) $190,920

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Definitions:

Control Group

In experimental research, a group of subjects that does not receive the experimental treatment, used as a benchmark to measure the effect of the treatment.

Fake Cigarette

A non-tobacco product designed to imitate a real cigarette, often used to aid quitting smoking.

Independent Variable

The variable that is manipulated by the researcher to observe its effect on the dependent variable.

Dependent Variable

A variable in scientific research that is affected by changes in another variable, called the independent variable.