Question

In February, the total fixed costs at Doster Hotel was $35,000. With 4,500 rooms sold in February, the average fixed cost per room sold was $7.50. The forecast for March projects an 8% increase in occupancy over February. If the increase in sales volume occurs, the total fixed costs for March would be:

A) $38,000
B) $40,250
C) $45,000
D) $47,600

Answer 1

C ) because you count it up and you do calculations

Answer 2

To calculate the total fixed costs for March at Doster Hotel, we need to find the average fixed cost per room sold in February and then multiply it by the projected number of rooms sold in March.

Step-by-step explanation:

To calculate the total fixed costs for March, we need to first find the average fixed cost per room sold in February. We can do this by dividing the total fixed costs in February ($35,000) by the number of rooms sold in February (4,500). The result is $7.50, which represents the average fixed cost per room sold in February.

Next, we need to calculate the total fixed costs for March based on the forecasted 8% increase in occupancy over February. Since the average fixed cost per room sold remains the same ($7.50), we can multiply this by the projected number of rooms sold in March to find the total fixed costs for March.

Based on the information provided, the correct answer is C) $45,000.