The Royal Canadian Lodge in Banff, Alberta, has accumulated records of the total electrical costs of the

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The Royal Canadian Lodge in Banff, Alberta, has accumulated records of the total electrical costs of the hotel and the number of occupancy-days over the last year. An occupancy-day represents a room rented out for one day. The hotel?s business is highly seasonal, with peaks occurring during the ski season and in the summer.

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Required:

1. Using the high?low method, estimate the fixed cost of electricity per month and the variable cost of electricity per occupancy-day. Round the fixed cost to the nearest whole dollar and the variable cost to the nearest whole cent.

2. What factors other than occupancy-days are likely to affect the monthly variation in electrical costs?

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Related Book For  book-img-for-question

Introduction to Managerial Accounting

ISBN: 978-1259105708

5th Canadian edition

Authors: Peter C. Brewer, Ray H. Garrison, Eric Noreen, Suresh Kalagnanam, Ganesh Vaidyanathan

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