The La Lague Hotel has the following costs at two sales levels Monthly Room

# The la lague hotel has the following costs at two

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Problem 5The La Lague Hotel has the following costs at two sales levels:Monthly Room SalesRooms 20003000Payroll:Salaries\$15,000\$15,000FixedVariableFixed\$15,000Wages40,00060,000Variable\$20 per roomEmployee benefits9,20010,700Mixed\$1.5 per room\$6,200Supplies2,0003,000Variable\$1 per roomUtilities8,0008,000Fixed\$8,000Other operating costs4,0005,000Mixed\$1 per room\$2,000Building rent8,0008,000Fixed\$8,000Interest expense2,0002,000Fixed\$2,000Insurance3,0003,000Fixed\$3,000Total\$23.5 perroom\$44,200Required:1)Identify each cost as fixed, variable, or mixed. 2)What are the total estimated monthly fixed costs? 3)What are the total estimated variable costs per room sold?4)Develop a single equation to estimate the total costs at various levels of activity. Page 4 of 7
Problem 6A fine dining restaurant is considering replacing its current dishwasher with a new energyefficient model. Although the current one has a present book value of \$1,000, its currentmarket value is \$2,000 and, if held for five more years, this would drop to \$300. If themanager decides to keep the current one, approximately \$500 of repairs must be performed.The following is a schedule of expected annual expenses for each option over the next fiveyears:Keep CurrentBuy NewMaintenance\$400\$200Labor12,00012,000Energy800500Water400400The new machine would cost \$7,000 and is expected to have a salvage value of \$2,000 at theend of five years.Required:1)

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• Spring '20