Three Methods of Cost Behavior Analysis; Correlation Analysis; Standard Error of the Estimate. The manage¬ ment of the Rest-Time Hotel is interested in an analysis of the fixed and variable costs in the electricity used relative to hotel occupancy. The following data have been gathered from records for the year:

Electricity Month Guest Days Cost January.

1,000

$ 400 February.

1,500 500 March.

2,500 500 April.

3,000 700 May.

2,500 600 June.

4,500 800 July.

6,500 1,000 August.

6,000 900 September.

5,500 900 October.

3,000 700 November.

2,500 600 December.

3,500 800 Total.

42,000

$8,400 Required:

(1) Determine the fixed and variable elements of the electricity cost (round the variable rate to four decimal places), using each of the following methods:

(a) the method of least squares

(b) the high and low points method

(c) a scattergraph with trend line fitted by inspection

(2) Compute the coefficient of correlation, r, and the coefficient of determination, r2, for guest days and elec¬ tricity cost. ' '

(3) Compute the standard error of the estimate.

(4) Compute the 90% confidence interval for electricity cost at the 2,000-guest-days capacity.