In a week when a hotel sells 800 room nights, its cost of cleaning rooms is $23,000. In a week when it sells 500 room nights, its total room cleaning cost is $20,000. Use the high-low method to determine the hotel's fixed cost per week to clean rooms.

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Quizplus · Accepted Answer

The high-low method calculates variable cost per room night as ($23,000 - $20,000) / (800 - 500) = $10. Fixed cost is then calculated using either high or low point: $23,000 - (800 * $10) = $15,000.

In a Week When a Hotel Sells 800 Room Nights