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In question clearly given the variable cost per level. Why variable cost per unit same for the different level of occupancy.as far as i know variable cost should be charged £85 for the high, £95 for middle and the £70 for lower level. But in answer £95, £85 and £70 used for the same level of occupancy.
The question means that two things vary independently:
1 The spa can vary the fee and this will affect occupancy levels.
2 Quite independently the variable costs could be 95, 85, or 70. The costs do not vary with occupancy. We only know that they are most likely to be 85, but they could be 95 or 70 irrespective of occupancy.
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