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. Occupancy- Days Electrical Costs Month January 4,260 $ 15,082 February 3,650 $ 14,112 March 3,160 $ 13,272 April 2,150 $ 9,030 May 2,260 $ 9,492 June 1,450 $ 6,090 July 3,180 $ 13,356 August 3,750 $ 14,532 September 2,220 $ 9,324 October 1,580 $ 6,636 November 1,690 $ 7,098 December 2,750 $ 11,550 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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