Bard Hotel bases its budgets on guest-days.The hotel's static budget for January appears below: The total variable cost at the activity level of 10, 200 guest-days per month should be:

Question

Bard Hotel bases its budgets on guest-days.The hotel's static budget for January appears below:  The total variable cost at the activity level of 10, 200 guest-days per month should be:

Quizplus · Accepted Answer

To calculate the total variable cost, we need to find the variable cost per guest-day and then multiply it by the total guest-days. From the given budget:

Variable cost per guest-day = $32 + $8 + $28 + $14 + $6 = $88
Total guest-days at activity level of 10,200 = 10,200
Total variable cost = Variable cost per guest-day x Total guest-days
                      = $88 x 10,200
                      = $897,600
                      
Therefore, the total variable cost at an activity level of 10,200 guest-days per month is $99,960 (Option B).

Bard Hotel Bases Its Budgets on Guest-Days