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 out for one day. The hotel's business is highly seasonal, with peaks occurring during the ski season and in the summer.
Month | Occupancy- Days | Electrical Costs | |||||
January | 2,830 | $ | 6,750 | ||||
February | 3,340 | $ | 7,410 | ||||
March | 3,650 | $ | 7,905 | ||||
April | 1,840 | $ | 5,520 | ||||
May | 750 | $ | 2,250 | ||||
June | 1,830 | $ | 5,490 | ||||
July | 3,890 | $ | 8,190 | ||||
August | 1,700 | $ | 5,100 | ||||
September | 4,060 | $ | 8,410 | ||||
October | 2,260 | $ | 6,780 | ||||
November | 1,350 | $ | 4,050 | ||||
December | 290 | $ | 870 | ||||
|
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)
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