Problem

Through using the high-low method, Regency Hotels estimates the total costs of providing r...

Through using the high-low method, Regency Hotels estimates the total costs of providing room service meals to amount to $5,950 per month, plus 30 percent of room service revenue.

a.    What is the contribution margin ratio of providing room service meals?


b.   What is the break-even point for room service operations in terms of total mom service revenue?


c. What would you expect to be the total cost of providing room service in a month in which room service revenue amounts to $ 15,000?

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