Question

Luxury Resorts has been evaluating how it might expand its sustainability efforts in its hotels.

To evaluate these​ options, management has gathered data for the past year for its laundry costs and housekeeping costs. The costs and occupancy data​ include:

Requirement 1. Using the​ high-low method, calculate the cost per guest of laundry per day.​ (The volume should be the number of room​ days, which you will have to calculate for each​ month.)

Begin by calculating the number of room days for each month.

	# of room days
January	54020
February	59860
March	52560
April	45260
May	35040
June	39420
July	43800
August	40880
September	27740
October	37960
November	36500
December	48180

​(Round your answer to the nearest​ cent.)

The variable cost per guest of laundry per day is $

0.45

.

Requirement 2. Using the​ high-low method, calculate the cost per guest of housekeeping per day.​ (Again, the volume should be the number of room​ days, which you would have calculated for Requirement​ 1.) ​(Round your answer to the nearest​ cent.)

The variable cost per guest of housekeeping per day is $

1.35

.

Requirement 3. Using the​ high-low method, evaluate the proposal to give guests a $0.70 per day credit for reusing their room linens. Does it appear to be cost-effective to offer this​ program?

This does not/does appear to be a cost effective program as the credit for reusing room linens is less/more than the variable cost of laundering the linens.

Requirement 4. Using the​ high-low method, evaluate the proposal to give guests a $ 0.90 per day credit for skipping housekeeping services. Does it appear to be cost effective to offer this​ program?

This does/does not appear to be a cost effective program as the credit for skipping housekeeping services is more/less than the variable cost of laundering the linens.

Requirement 5. Using regression​ analysis, calculate the cost per guest of laundry per day.​ (Again, the volume should be the number of room​ days, which you would have calculated for Requirement​ 1.) ​(Round your answer to the nearest​ cent.)

The variable cost per guest of laundry per day is $

.

Requirement 6. Using regression​ analysis, calculate the cost per guest of housekeeping per day.​ (Again, the volume should be the number of room​ days, which you would have calculated for Requirement​ 1.) ​(Round your answer to the nearest​ cent.)

The variable cost per guest of housekeeping per day is $

.

Requirement 7. Using regression​ analysis, evaluate the proposal to give guests a $0.70 per day credit for reusing their room linens. Does it appear to be cost effective to offer this​ program?

This

▼

appear to be a cost effective program as the credit for reusing room linens is

▼

than the variable cost of laundering the linens.Requirement 8. Using regression​ analysis, evaluate the proposal to give guests a $ 0.90 per day credit for skipping housekeeping services. Does it appear to be cost effective to offer this​ program?

This

▼

appear to be a cost effective program as the credit for skipping housekeeping services is

▼

than the variable cost of laundering the linens.

Requirement 9. Regarding the two​ programs, what is your recommendation to management about which​ program(s) to​ implement? Provide rationale for your recommendation.

▼

credit​ program(s) should be​ implemented;

▼

cost effective and environmentally conscious​ program(s) that stakeholders are likely to appreciate.

Answer 1

Requirement 3: the variable cost of laundry per day is $0.45. if the company provides $0.70 per day credit for reusing their room linens, it is more than variable cost of laundry per day, thus will result in extra cost to company.

This does not appear to be a cost effective program as the credit for reusing room linens is more than the variable cost of laundering the linens.

Requirement 4:the variable cost of housekeeping per guest per day is $1.35. if the company provides $0.90 per day credit for skipping their housekeeping, it is less than variable cost of housekeeping per guest per day, thus will result in a gain of $0.45 to company

This does appear to be a cost effective program as the credit for skipping housekeeping services is less than the variable cost of laundering the linens.

Please share occupancy and costs data to perform regression analysis and to provide answers to remaining questions.