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 $ 15,000 $ 4,250 Month January 3,000 February 850 March 4,430 $ 18,570 April 1,470 $7,350. May 3,650 $ 18,250 June 1,120 $ 5,600 July 3,910 $ 17,425 August 3,840 $ 17,288 September 1,900 $ 9,500 October 1,090 November December 2,040 2,990 $ 5,450 $ 10,200 $14,950 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 per occupancy-day Fixed cost of electricity per month
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