Question
Beaches Resort is an all-inclusive resort located in the Caribbean. The business is highly seasonal, with peaks occuring during spring and late fall. Following is
Beaches Resort is an all-inclusive resort located in the Caribbean. The business is highly seasonal, with peaks occuring during spring and late fall. Following is the data for the past year of the resort's total electrical costs and the number of occupancy days.
| Month | Occupancy-Days | Electrical Costs | |||
| January | 3,400 | $ | 9,536 | ||
| February | 4,150 | $ | 10,180 | ||
| March | 3,080 | $ | 9,184 | ||
| April | 2,230 | $ | 7,136 | ||
| May | 1,570 | $ | 5,024 | ||
| June | 1,910 | $ | 6,112 | ||
| July | 3,880 | $ | 9,997 | ||
| August | 3,830 | $ | 9,904 | ||
| September | 2,060 | $ | 6,592 | ||
| October | 1,940 | $ | 6,208 | ||
| November | 1,050 | $ | 3,360 | ||
| December | 2,710 | $ | 8,168 | ||
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.)
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Principles of Accounting
Authors: Belverd E. Needles, Marian Powers and Susan V. Crosson
12th edition
978-1133603054, 113362698X, 9781285607047, 113360305X, 978-1133626985
