Antelope Park Amoco (APA) in Antelope Park, Alaska, has noticed that utility bills are substantially higher the

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Antelope Park Amoco (APA) in Antelope Park, Alaska, has noticed that utility bills are substantially higher the colder the average monthly temperature is. The only thing in the shop that uses natural gas is the furnace. Because of prevailing low temperatures, the furnace is used every month of the year (though less in the summer months and very little in August). Everything else in the shop runs on electricity, and electricity use is fairly constant throughout the year.

For a year, APA has been recording the average daily temperature and the cost of its monthly utility bills for natural gas and electricity.

 





Avg. Temp FUtility Cost
January31760
February41629
March43543
April44510
May46275
June50233
July53220
August60210
September50305
October40530
November30750
December20870


Required
Use the high-low method to estimate utility cost for the upcoming months of January and February. The forecast for January is a near record average temperature of 10â—¦F; temperatures in February are expected to average40â—¦F.

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Cost management a strategic approach

ISBN: 978-0073526942

5th edition

Authors: Edward J. Blocher, David E. Stout, Gary Cokins

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