Insomniac Hotel's cost function based on guest- days of occupancy for custodial cost is given as: Y = $50,000 + $10.00X. Insomniac Hotel expects an occupancy level of 12,000 guest days. Insomniac Hotel's expected total cost is:
A) $120,000
B) $10.00
C) $170,000
D) $50,000

Question

Quizplus · Accepted Answer

The total cost is calculated by substituting the expected occupancy level into the cost function: Y = $50,000 + $10.00(12,000) = $50,000 + $120,000 = $170,000.

Insomniac Hotel's Cost Function Based on Guest- Days of Occupancy