Papenfuss Family Inn is a bed and breakfast establishment in a converted 100-year-old mansion. The Inn's guests appreciate its gourmet breakfasts and individually decorated rooms. The Inn's overhead budget for the most recent month appears below: The Inn's variable overhead costs are driven by the number of guests. What would be the total budgeted overhead cost for a month if the activity level is 76 guests?

Question

Papenfuss Family Inn is a bed and breakfast establishment in a converted 100-year-old mansion. The Inn's guests appreciate its gourmet breakfasts and individually decorated rooms. The Inn's overhead budget for the most recent month appears below:  The Inn's variable overhead costs are driven by the number of guests. What would be the total budgeted overhead cost for a month if the activity level is 76 guests?

Quizplus · Accepted Answer

We need to calculate the total budgeted overhead cost for a month if the activity level is 76 guests. To do this, we will use the following formula:
Total budgeted overhead cost = Fixed overhead cost + (Variable overhead rate per guest × Number of guests)
From the given data, we can see that the fixed overhead cost is $6,600. The variable overhead rate per guest is $90.
Therefore, Total budgeted overhead cost = $6,600 + ($90 × 76) = $8,274.40
Hence, the correct option is C.

Papenfuss Family Inn Is a Bed and Breakfast Establishment in a Converted