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 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 February Electrical Costs $ 9,536 $10,180 Occupancy-Days 3,400 4,150 March 3,080 $9,184 April 2,230 $ 7,136 May 1,570 $ 5,024 June 1,910 $6,112 July 3,880 $ 9,997 August 3,830 $ 9,904 September 2,060 $ 6,592 October 1,940 $ 6,208 November 1,050 December 2,710 $ 3,360 $8,168 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
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