Serial Case C6 72Calculate and compare cost estimates using high low and regression methods (Learning Objectives 4 5) This case is a continuation of the Caesars Entertainment Corporation serial case that began in Chapter 1 Refer to the introductory story in Chapter 1, here for additional background (The components of the Caesars serial case can be completed in any order ) Caesar Entertainment Corporations Form 10 K contains a variety of data in addition to financial statements Below is a list that contains Caesars food and beverage costs (adapted) taken from its Statements of Operations for the past 22 years In addition, the number of hotel rooms and suites owned by Caesars at the end of each of those 22 years has been gathered from other information provided in the Form 10 Ks Year ended Food and beverage costs of hotel rooms suites 12 31 2014 $ 694,000,000 39,218 12 31 2013 $ 639,000,000 42,200 12 31 2012 $ 634,000,000 42,710 12 31 2011 $ 665,700,000 42,890 12 31 2010 $ 621,300,000 42,010 12 31 2009 $ 596,000,000 41,830 12 31 2008 $ 639,500,000 39,170 12 31 2007 $ 716,500,000 38,130 12 31 2006 $ 697,600,000 38,060 12 31 2005 $ 482,300,000 43,060 12 31 2004 $ 278,100,000 17,220 12 31 2003 $ 255,200,000 14,780 12 31 2002 $ 240,600,000 14,551 12 31 2001 $ 232,400,000 13,598 12 31 2000 $ 228,000,000 11,562 12 31 1999 $ 218,600,000 11,760 12 31 1998 $ 116,600,000 11,685 12 31 1997 $ 103,600,000 8,197 12 31 1996 $ 95,900,000 6,478 12 31 1995 $ 91,500,000 5,736 12 31 1994 $ 82,800,000 5,367 12 31 1993 $ 76,500,000 5,348 Caesars Entertainment Corporation Selected data from Form 10 K (adapted) Requirements (use excel) Using the high low method, find the following cost estimates Variable food and beverage cost per hotel room suite Fixed food and beverage cost per hotel room suite Perform a regression analysis using Excel Use of hotel rooms suites as the X and the Food and beverage costs as the Y in your regression analysis What is the estimated variable food and beverage cost per hotel room suite What is the estimated fixed food and beverage cost per hotel room suite In your opinion, is the number of hotel rooms and suites a good predictor of Caesars food and beverage costs Why or why not

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Serial Case C6-72Calculate and compare cost estimates using high-low and regression methods (Learning Objectives 4 & 5) This case is a continuation of the Caesars

Serial Case

C6-72Calculate and compare cost estimates using high-low and regression methods (Learning Objectives 4 & 5)

This case is a continuation of the Caesars Entertainment Corporation serial case that began in Chapter 1. Refer to the introductory story in Chapter 1, here for additional background. (The components of the Caesars serial case can be completed in any order.)

Caesar Entertainment Corporations Form 10-K contains a variety of data in addition to financial statements. Below is a list that contains Caesars food and beverage costs (adapted) taken from its Statements of Operations for the past 22 years. In addition, the number of hotel rooms and suites owned by Caesars at the end of each of those 22 years has been gathered from other information provided in the Form 10-Ks.

Year ended	Food and beverage costs	# of hotel rooms & suites
12/31/2014	$ 694,000,000	39,218
12/31/2013	$ 639,000,000	42,200
12/31/2012	$ 634,000,000	42,710
12/31/2011	$ 665,700,000	42,890
12/31/2010	$ 621,300,000	42,010
12/31/2009	$ 596,000,000	41,830
12/31/2008	$ 639,500,000	39,170
12/31/2007	$ 716,500,000	38,130
12/31/2006	$ 697,600,000	38,060
12/31/2005	$ 482,300,000	43,060
12/31/2004	$ 278,100,000	17,220
12/31/2003	$ 255,200,000	14,780
12/31/2002	$ 240,600,000	14,551
12/31/2001	$ 232,400,000	13,598
12/31/2000	$ 228,000,000	11,562
12/31/1999	$ 218,600,000	11,760
12/31/1998	$ 116,600,000	11,685
12/31/1997	$ 103,600,000	8,197
12/31/1996	$ 95,900,000	6,478
12/31/1995	$ 91,500,000	5,736
12/31/1994	$ 82,800,000	5,367
12/31/1993	$ 76,500,000	5,348
Caesars Entertainment Corporation Selected data from Form 10-K (adapted)

Requirements (use excel)

Using the high-low method, find the following cost estimates:
1. Variable food and beverage cost per hotel room/suite
2. Fixed food and beverage cost per hotel room/suite
Perform a regression analysis using Excel. Use # of hotel rooms & suites as the X and the Food and beverage costs as the Y in your regression analysis.
1. What is the estimated variable food and beverage cost per hotel room/suite?
2. What is the estimated fixed food and beverage cost per hotel room/suite?
3. In your opinion, is the number of hotel rooms and suites a good predictor of Caesars food and beverage costs? Why or why not?