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Pondview Apartments is a 600-unit apartment complex. When the apartments are 90% occupied, monthly operating...

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Accounting

Pondview Apartments is a 600-unit apartment complex. When the apartments are 90% occupied, monthly operating costs total $205,480. When occupancy dips to 80%, monthly operating costs fall to $201,760. The owner of the apartment complex is worried because many of the apartment residents work at a nearby manufacturing plant that has just announced it will close in three months. The apartment owner fears that occupancy of her apartments will drop to 60% if residents lose their jobs and move away. Assuming the same relevant range, what can the owner expect her operating costs to be if occupancy falls to 60%?
Let's begin by determining the formula that is used to calculate the variable cost (slope)
Change in cost
Change in volume = Variable cost (slope)
Now determine the formula that is used to calculate the fixed cost component.
Total operating cost
Total variable cost
Fixed cost
Use the high-low method to determine Pondview's operating cost equation.
y=
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