Exercise $6$A$-1($Algo$)$ High$-$Low Method $[$L$06-10]$

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.

Required:

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

per occupancy$-$day

Fixed cost of electricity

per month

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.