Exercise 5A-1 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. Electrical Costs Month Occupancy-Days 3,180 $ 6,510 $6,261 7,392 January February March 2,920 3,780 2,160 April May 5,569 1,820 $5,261 $ 7,829 7,896 $4,984 $1,596 $ 4,424 5,908 650 2,050 4,050 4,070 June July August September October 1,780 570 November 1,580 2,680 December 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. Archer Company is a wholesaler of custom-built air-conditioning units for commercial buildings. It gathered the following monthly data relating to units shipped and total shipping expense: Total Shipping Expense 2,400 2,900 $2,300 2,600 2,900 3,900 1,800 Units Shipped Month January February March 3 6 4 pril May 5 7 June 8 July 1 Exercise 5A-4 Part 1 Required: 1-a. Prepare a scattergraph using the data given above. Plot cost on the vertical axis and activity on the horizontal axis. Instructions: 1. On the graph below, use the point tool (January) to plot units shipped on the horizontal axis and the shipping expense on the vertical axis. 2. Repeat the same process for the plotter tools (February to July). 3. To enter exact coordinates, click on the point and enter the values of x and y 4. To remove a point from the graph, click on the point and select delete option January $5,000 February $4,500 $4,000 March $3,500 $3,000 April $2,500 $2,000 May CD S1,500 $1,000 $500 June $0 0 3 4 5 6 7 8 9 10 July Units Shipped Shipping Expenses co Archer Company is a wholesaler of custom-built air-conditioning units for commercial buildings. It gathered the following monthly data relating to units shipped and total shipping expense: Total Shipping xpense 2,400 Units Month Shipped January February March 3 2,900 2,300 2,600 4 pril May 5 7 2,900 3,900 1,800 June 8 July 1 Exercise 5A-4 Part 2 2. Using the high-low method, estimate the cost formula for shipping expense. Variable shipping expense Fixed shipping expense per unit per month .. .... Archer Company is a wholesaler of custom-built air-conditioning units for commercial buildings. It gathered the following monthly data relating to units shipped and total shipping expense: Total Shipping Units Month Shipped Expense $ 2,400 2,900 2,300 2,600 $2,900 $3,900 $1,800 January 3 February 6 March 4 April May 5 7 June July 1 Exercise 5A-4 Part 4 4. What factors, other than the number of units shipped, are likely to affect the company's shipping expense? (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.) Weight of the units shipped | ? Distance traveled Sales commissions | ? Trade discounts given to repeat customers Express shipping to meet a deadline Exercise 5A-1 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. Electrical Costs Month Occupancy-Days 3,180 $ 6,510 $6,261 7,392 January February March 2,920 3,780 2,160 April May 5,569 1,820 $5,261 $ 7,829 7,896 $4,984 $1,596 $ 4,424 5,908 650 2,050 4,050 4,070 June July August September October 1,780 570 November 1,580 2,680 December 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. Archer Company is a wholesaler of custom-built air-conditioning units for commercial buildings. It gathered the following monthly data relating to units shipped and total shipping expense: Total Shipping Expense 2,400 2,900 $2,300 2,600 2,900 3,900 1,800 Units Shipped Month January February March 3 6 4 pril May 5 7 June 8 July 1 Exercise 5A-4 Part 1 Required: 1-a. Prepare a scattergraph using the data given above. Plot cost on the vertical axis and activity on the horizontal axis. Instructions: 1. On the graph below, use the point tool (January) to plot units shipped on the horizontal axis and the shipping expense on the vertical axis. 2. Repeat the same process for the plotter tools (February to July). 3. To enter exact coordinates, click on the point and enter the values of x and y 4. To remove a point from the graph, click on the point and select delete option January $5,000 February $4,500 $4,000 March $3,500 $3,000 April $2,500 $2,000 May CD S1,500 $1,000 $500 June $0 0 3 4 5 6 7 8 9 10 July Units Shipped Shipping Expenses co Archer Company is a wholesaler of custom-built air-conditioning units for commercial buildings. It gathered the following monthly data relating to units shipped and total shipping expense: Total Shipping xpense 2,400 Units Month Shipped January February March 3 2,900 2,300 2,600 4 pril May 5 7 2,900 3,900 1,800 June 8 July 1 Exercise 5A-4 Part 2 2. Using the high-low method, estimate the cost formula for shipping expense. Variable shipping expense Fixed shipping expense per unit per month .. .... Archer Company is a wholesaler of custom-built air-conditioning units for commercial buildings. It gathered the following monthly data relating to units shipped and total shipping expense: Total Shipping Units Month Shipped Expense $ 2,400 2,900 2,300 2,600 $2,900 $3,900 $1,800 January 3 February 6 March 4 April May 5 7 June July 1 Exercise 5A-4 Part 4 4. What factors, other than the number of units shipped, are likely to affect the company's shipping expense? (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.) Weight of the units shipped | ? Distance traveled Sales commissions | ? Trade discounts given to repeat customers Express shipping to meet a deadline