Exercise 5A-1 (Algo) High-Low Method [LO5-10] 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. Occupancy- Days Electrical Costs Month January 3,400 $ 10,234 February 3,280 $ 10,052 March 4,370 $ 11,605 April 1,950 $ 6,825 May 680 $ 2,380 June 1,960 $ 6,860 July 4,040 $ 11,060 August 4,080 $ 11,100 September 2,240 $ 7,602 October 1,030 $ 3,605 November 1,460 $ 4,634 December 2,700 $ 8,974 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 select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.) Systematic factors like guests, switching off fans and lights. Number of days present in a month. Income taxes paid on hotel income. Seasonal factors like winter or summer. Fixed salary paid to hotel receptionist. [The following information applies to the questions displayed below.] Bargain Rental Car offers rental cars in an off-airport location near a major tourist destination in California. Management would like to better understand the variable and fixed portions of its car washing costs. The company operates its own car wash facility in which each rental car that is returned is thoroughly cleaned before being released for rental to another customer. Management believes that the variable portion of its car washing costs relates to the number of rental returns. Accordingly, the following data have been compiled: Month Rental Returns Car Wash Costs January 2,300 $ 10,400 February 2,500 $ 12,800 March 2,700 $ 11,200 April 2,900 $ 13,400 May June 3,600 $ 15,600 4,900 $ 22,100 July 5,500 $ 21,600 August 5,300 $ 20,700 September 4,700 $ 22,200 October 3,800 $ 19,300 November 2,100 $ 10,100 December 2,600 $ 12,100 Exercise 5A-2 Part 2 (Algo) 2. Using least-squares regression, estimate the variable cost per rental return and the monthly fixed cost incurred to wash cars. (Round Fixed cost to the nearest whole dollar amount and the Variable cost per unit to 2 decimal places.) Fixed cost per month Variable cost per rental return Exercise 5A-3 (Algo) Cost Behavior; High-Low Method [LO5-10] Hoi Chong Transport, Limited, operates a fleet of delivery trucks in Singapore. The company has determined that if a truck is driven 102,000 kilometers during a year, the average operating cost is 11.3 cents per kilometer. If a truck is driven only 68,000 kilometers during a year, the average operating cost increases to 12.9 cents per kilometer. Required: 1. Using the high-low method, estimate the variable operating cost per kilometer and the annual fixed operating cost associated with the fleet of trucks. 2. Express the variable and fixed costs in the form Y = a + bx. 3. If a truck were driven 85,000 kilometers during a year, what total operating cost would you expect to be incurred? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Using the high-low method, estimate the variable operating cost per kilometer and the annual fixed operating cost associated with the fleet of trucks. (Do not round your intermediate calculations. Round the Variable cost per kilometer to 3 decimal places.) Variable cost Fixed cost per kilometer per year Problem 5A-10 (Algo) Least-Squares Regression Method; Scattergraph; Cost Behavior [LO5-11] [The following information applies to the questions displayed below.] Professor John Morton has just been appointed chairperson of the Finance Department at Westland University. In reviewing the department's cost records, Professor Morton has found the following total cost associated with Finance 101 over the last five terms: Number of Sections Term Offered Total Cost Fall, last year 5 $ 11,000 Winter, last year 6 $ 12,000 Summer, last year 2 $ 6,000 Fall, this year 3 $ 10,500 Winter, this year 7 $ 14,000 Professor Morton knows that there are some variable costs, such as amounts paid to graduate assistants, associated with the course. He would like to have the variable and fixed costs separated for planning purposes. Problem 5A-10 Part 2 (Algo) 2-a. Using the least-squares regression method, estimate the variable cost per section and the total fixed cost per term for Finance 101. 2-b. Express these estimates in the form Y = a + bx. Complete this question by entering your answers in the tabs below. Required 2A Required 2B Problem 5A-10 Part 3 (Algo) 3-a. Assume that because of the small number of sections offered during the Winter Term this year, Professor Morton will have to offer ten sections of Finance 101 during the Fall Term. Compute the expected total cost for Finance 101. 3-b. Can you see any problem with using the cost formula from (2) above to derive this total cost figure? Complete this question by entering your answers in the tabs below. Required 3A Required 3B Assume that because of the small number of sections offered during the Winter Term this year, Professor Morton will have to offer ten sections of Finance 101 during the Fall Term. Compute the expected total cost for Finance 101. (Round intermediate calculations and final answers to the nearest whole dollar amount.) Fixed cost Variable cost Total expected cost