Q2. Cost estimation (High-Low method) EXERCISE 3-3 High Low Method (L03) PIBS 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 out for one day. The hotel's business is highly seasonal, with peaks occurring during the ski season and in the summer. Month January... February March April May June July August September October November December Occupancy-Days 1,736 1,904 2,356 960 360 744 2,108 2,406 840 124 720 1,364 Electrical Costs $4,127 $4,207 $5,083 $2,857 $1,871 $2,696 $4,670 $5,148 $2,691 $1,588 $2,454 $3,529 1) Compute fixed cost of electricity and unit variable cost. Also set cost function. 2) What other factors other than occupancy-days may affect the variation in electrical costs? 3) Explain how the managers can use the estimated cost functions