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	3,350	$ 9,241
February	3,610	$ 9,666
March	1,680	$ 5,208
April	1,230	$ 3,813
May	4,380	$ 10,428
June	1,690	$ 5,239
July	4,130	$ 10,058
August	4,250	$ 10,125
September	1,950	$ 6,045
October	2,140	$ 6,634
November	1,480	$ 4,588
December	2,710	$ 7,829

Required:

1. Using the high-low method, estimate the fixed cost of electricity per month and the variable cost of electricity per occupancy-day.

2. What other factors in addition to occupancy-days are likely to affect the variation in electrical costs from month to month?

check all that apply

• Systematic factors like guests, switching off fans and lights.
• Number of days present in a month.
• Income taxes paid on hotel income.
• Seasonal factors like winter or summer.
• Fixed salary paid to hotel receptionist.