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	2,830	$ 6,750
February	3,340	$ 7,410
March	3,650	$ 7,905
April	1,840	$ 5,520
May	750	$ 2,250
June	1,830	$ 5,490
July	3,890	$ 8,190
August	1,700	$ 5,100
September	4,060	$ 8,410
October	2,260	$ 6,780
November	1,350	$ 4,050
December	290	$ 870

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.)

2. What other factors in addition to occupancy-days are likely to affect the variation in electrical costs from month to month? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.)

check all that apply

• Systematic factors like guests, switching off fans and lights.unanswered
• Number of days present in a month.unanswered
• Income taxes paid on hotel income.unanswered
• Seasonal factors like winter or summer.unanswered
• Fixed salary paid to hotel receptionist.unanswered

Bargain Rental Car offers rental cars in an off-airport location near a major tourist destination in California. Management would like to better understand the variable and fixed portions of its car washing costs. The company operates its own car wash facility in which each rental car that is returned is thoroughly cleaned before being released for rental to another customer. Management believes that the variable portion of its car washing costs relates to the number of rental returns. Accordingly, the following data have been compiled:

Month	Rental Returns	Car Wash Costs
January	2,400	$ 10,600
February	2,500	$ 12,900
March	2,700	$ 11,400
April	2,900	$ 13,700
May	3,600	$ 15,800
June	5,000	$ 22,500
July	5,500	$ 21,800
August	5,400	$ 21,200
September	4,700	$ 22,400
October	3,900	$ 19,900
November	2,200	$ 10,300
December	2,700	$ 12,800

2. Using least-squares regression, estimate the variable cost per rental return and the monthly fixed cost incurred to wash cars.(Round Fixed cost to the nearest whole dollar amount and the Variable cost per unit to 2 decimal places.)

Fixed cost per month

Variable Cost per rental return

[The following information applies to the questions displayed below.]

Archer Company is a wholesaler of custom-built air-conditioning units for commercial buildings. It gathered the following monthly data relating to units shipped and total shipping expense:

Month	Units Shipped	Total Shipping Expense
January	4	$ 2,300
February	7	$ 2,800
March	5	$ 2,200
April	6	$ 2,500
May	8	$ 2,800
June	9	$ 4,500
July	2	$ 1,700

2. Using the high-low method, estimate the cost formula for shipping expense.

Variable shipping expense per unit

Fixed shipping expense per month

Archer Company is a wholesaler of custom-built air-conditioning units for commercial buildings. It gathered the following monthly data relating to units shipped and total shipping expense:

Month	Units Shipped	Total Shipping Expense
January	4	$ 2,300
February	7	$ 2,800
March	5	$ 2,200
April	6	$ 2,500
May	8	$ 2,800
June	9	$ 4,500
July	2	$ 1,700

4. What factors, other than the number of units shipped, are likely to affect the company's shipping expense? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.)

check all that apply

• Weight of the units shippedunanswered
• Distance traveledunanswered
• Sales commissionsunanswered
• Trade discounts given to repeat customersunanswered
• Express shipping to meet a deadline