Problem:
Marchi Family Inn is a bed and breakfast establishment in a converted 100-year-old mansion. The Inn's guests appreciate its gourmet breakfasts and individually decorated rooms. The Inn's overhead budget for the most recent month appears below:
Activity level 65 Guests
Variable overhead costs:
Supplies $ 156
Laundry $ 364
Fixed overhead costs:
Utilities $ 250
Salaries and wages $4,480
Depreciation $1,330
Total overhead cost $6,580
The Inn's variable overhead costs are driven by the number of guests. What would be the total budgeted overhead cost for a month if the activity level is 70 guests?
a. $42,460.00
b. $6,620.00
c. $7,086.15
d. $6,580.00