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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 hotel's 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
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