Answered step by step
Verified Expert Solution
Question
1 Approved Answer
ances Exercise 6A-1 (Algo) High-Low Method [LO6-10] The Cheyenne Hotel in Big Sky, Montana, has accumulated records of the total electrical costs of the
ances Exercise 6A-1 (Algo) High-Low Method [LO6-10] The Cheyenne Hotel in Big Sky, Montana, 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 for one day. The hotel's business is highly seasonal, with peaks occurring during the ski season and in the summer. Electrical Costa Month January Occupancy Days 3,300 $ 8,024 February 2,960 $7,767 March 3,550 $ 8,265 April 1,600 $ 4,800 May 1,370 $ 4,110 June 1,350 July 3,490 $4,050 $8,117 August 3,750 $ 0,560 September 1,390 4,170 October 1,060 November 1,520 December 2,900 $3,180 $4,560 $7,746 Required: 1. Using the high-low method, estimate the fixed cost of electricity per month and the variable cost of electricity per occupancy-day. (Do not round your intermediate calculations. Round your Variable cost answer to 2 decimal places and Fixed cost element answer to nearest whole dollar amount.) Variable cost of electricity Fixed cost of electricity per occupancy day per month 2. What other factors in addition to occupancy days are likely to affect the variation in electrical costs from month to month? (You may
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started