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 3,000 $15,000

February 850 $4,250

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 $5,450

November 2,040 $10,200

December 2,990 $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.)

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.)

• 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.