Answered step by step
Verified Expert Solution
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 | 540 | $ 1,620 |
February | 3,810 | $ 8,352 |
March | 4,100 | $ 8,736 |
April | 1,730 | $ 5,190 |
May | 3,520 | $ 7,968 |
June | 1,320 | $ 3,960 |
July | 3,420 | $ 7,668 |
August | 4,120 | $ 8,780 |
September | 1,610 | $ 4,830 |
October | 830 | $ 2,490 |
November | 1,420 | $ 4,260 |
December | 2,320 | $ 6,960 |
Required:
1. Using the high-low method, estimate the fixed cost of electricity per month and the variable cost of electricity per occupancy-day.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started