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

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.

Month Occupancy$-$Days Electrical Costs

January $3,030$ $ $9,044$

February $3,080$ $ $9,234$

March $3,980$ $ $11,913$

April $1,630$ $ $6,194$

May $1,270$ $ $4,826$

June $2,110$ $ $8,018$

July $650$ $ $2,470$

August $3,690$ $ $11,552$

September $1,960$ $ $7,448$

October $4,410$ $ $12,998$

November $1,600$ $ $6,080$

December $2,230$ $ $8,474$

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.$)$

$2.$ 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.$)$

check all that apply

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.