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.

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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Month Оссираncy-Days Electrical Costs January 1,736 $4,127 February 1,407 3,207 March 2,536 5,383 960 April 2,857 May 630 2,871 744 June 2,696 July 2,108 4,670 August 1,406 3,148 September 480 1,391 October 224 1,988 2,454 November 720 3,529 December 1,364