Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

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 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 3,000 $ 15,000
February 850 $ 4,250
March 4,430 $ 18,570
April 1,470 $ 7,350
May 3,650 $ 18,250
June 1,120 $ 5,600
July 3,910 $ 17,425
August 3,840 $ 17,288
September 1,900 $ 9,500
October 1,090 $ 5,450
November 2,040 $ 10,200
December 2,990 $ 14,950

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.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Health Care Marketing Audit A Complete Guide

Authors: Gerardus Blokdyk

2020 Edition

0655947469, 978-0655947462

More Books

Students also viewed these Accounting questions