Question
See attachment The Cheyenne Hotel in Big Sky, Montana, has accumulated records of the total electrical costs of the hotel and the number of occupancy-days
See attachment
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 | Occupancy- Days | Electrical Costs | |||
January | 2,620 | $ | 5,100 | ||
February | 580 | $ | 1,450 | ||
March | 4,080 | $ | 6,575 | ||
April | 2,000 | $ | 5,000 | ||
May | 2,880 | $ | 5,750 | ||
June | 1,750 | $ | 4,375 | ||
July | 3,430 | $ | 5,965 | ||
August | 940 | $ | 2,350 | ||
September | 1,570 | $ | 3,925 | ||
October | 4,320 | $ | 7,060 | ||
November | 1,210 | $ | 3,025 | ||
December | 2,740 | $ | 5,400 | ||
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)
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