Question
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.)
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