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The Alpine Hotel near Kosciuszko National Park in NSW, has accumulated records of the total electrical costs of the hotel and the number of occupancy-days

The Alpine Hotel near Kosciuszko National Park in NSW, 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 hotels business is highly seasonal, with peaks occurring during the ski season and in the summer.

Month

Occupancy-Days

Electrical Costs

January

1,736

$4,127

February

1,904

$4,207

March

960

$2,857

April

2,620

$5,732

May

840

$2,691

June

744

$2,696

July

2,108

$4,670

August

2,406

$5,148

September

130

$1,499

October

360

$1,871

November

720

$2,454

December

1,364

$3,529

Required:

Using the high-low method, estimate the fixed cost of electricity per month and the variable cost of electricity per occupancy-day. Round off the variable cost to the nearest cent and the fixed cost to the nearest dollar. (4 marks)

What other factor in addition to occupancy-days is likely to affect the variation in electrical costs from month to month? (1 marks)

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