Answered step by step
Verified Expert Solution
Link Copied!

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

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.

MonthOccupancy-dayElectrical Costs

January3,1806,510

February2,9206,261

March3,7807,392

April2,1605,569

May6501,820

June2,0505,261

July4,0507,829

August4,0707,896

September1,7804,984

October5701,596

November1,5804,424

December2,6805,908

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

2. What other factors in addition to occupancy-days are likely to affect the variation in electrical costs from month to month?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Essentials Of Forensic Accounting

Authors: Michael A Crain, William S Hopwood

2nd Edition

1948306441, 978-1948306447

More Books

Students also viewed these Accounting questions

Question

=+a) What is the maximin choice?

Answered: 1 week ago