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Exercise 2-5 High-Low Method [LO2-5] The Cheyenne Hotel in Big Sky, Montana, has accumulated records of the total electrical costs of the hotel and the
Exercise 2-5 High-Low Method [LO2-5] 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 out for one day. The hotel's business is highly seasonal with peaks occurring during the ski season and in the summer. Occupancy Electrical Month January February March April May June July August September October November December Days 2,640 2,860 980 2,420 2,090 4,470 4,020 3,940 1,630 1,090 1,390 2,910 Costs $13,200 $14,300 $ 4,900 $12,100 $10,450 $18,860 $ 17160 $16,760 $ 8150 5,450 $ 6,950 $14,550 2. What other factors other than occupancy-days are likely to affect the variation in electrical costs from month to month? (You may select more than one answer. Boxes left with question marks will be graded as incorrect.) Income taxes paid on hotel income. Systematic factors like guests, switching off fans and lights. Seasonal factors like winter or summer. Number of days present in a month
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