Question
Gator Beach Marts, a chain of convenience grocery stores in the Fort Lauderdale area, has store hours that fluctuate from month to month as the
Gator Beach Marts, a chain of convenience grocery stores in the Fort Lauderdale area, has store hours that fluctuate from month to month as the tourist trade in the community varies. The utility costs for one of the companys stores are listed below for the past six months.
Month Total Hours of Operation Total Utility Cost
January 550 $ 3,240
Feb 600 3,400
March 700 3,800
April 500 3,200
May 450 2,700
June 400 2,600
Use the high-low method to estimate the cost behavior for the store's utility costs. Express the cost
behavior in formula form (Y=a+bX). What is the variable utility cost per hour of operation?
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