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 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 hotel's business is highly seasonal, with peaks occurring during the ski season and in the summer. Month January Occupancy- Days Electrical Costs 3,300 $ 8,024 February 2,960 -$ 7,767 March 3,550 $ 8,265 April 1,600 $ 4,800 May 1,370 $ 4,110 June 1,350 $ 4,050 July 3,490 $ 8,117 August 3,750 $ 8,560 September 1,390 $ 4,170 October 1,060 $ 3,180 November 1,520 $ 4,560 December 2,900 $ 7,746 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.) Variable cost of electricity Fixed cost of electricity per occupancy-day per month
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