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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 hotel's business is highly seasonal, with peaks occurring during the ski season and in the summer. Month Electrical Costs Occupancy-Days 1,736 January $4,127 February 1,904 $4,207 March 2,612 $5,576 April 960 $2,857 May 127 $1,476 June 744 $2,696 2,108 $4,670 July August September 2,406 $5,148 840 $2,691 October 360 $1,871 November 720 $2,454 December 1,364 $3,529 Required: 1. Using the high-low method, estimate the variable cost of electricity per occupancy-day and the fixed cost of electricity per month. Round off the variable cost to the nearest whole cent and the fixed cost to the nearest whole dollar. (4 marks) 2. 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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