Roach Motel's cost function based on guest- days of occupancy for custodial cost is given as: Y = $60,000 + $5.50X. Roach Motel expects an occupancy level of 10,000 guest days. Roach Motel's expected total variable cost is:
A) $115,000
B) $60,000
C) $55,000
D) $5.50

Question

Quizplus · Accepted Answer

The total variable cost is calculated by multiplying the variable cost per unit ($5.50) by the expected occupancy level (10,000 guest days), which equals $55,000.

Roach Motel's Cost Function Based on Guest- Days of Occupancy