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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 out for one day. The hotel's business is highly seasonal, with peaks occurring during the ski season and in the summer. Occupancy- Electrical Month January $16,450 3,290 $15,800 February 3,160 9,000 March 1,800 $18,500 4,430 Apr 4,850 May 970 8,250 June 1,650 $18,020 July 4,150 $18,070 August 4,160 2,050 $10,250 September 5,550 October 1,110 3,900 November 780 $14,050 December 2,810 Required: 1. 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) Occupancy Electrical Days Costs High activity level Low activity level OS Change Variable cost per occupancy-day Fixed cost element
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