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

image text in transcribed
image text in transcribed
image text in transcribed
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 out for one day. The hotel's business is highly seasonal, with peaks occurring during the ski season and in the summer. Occupancy- Electrical Month Days Costs January 2,830 $ 6,750 February 3,340 $ 7,410 March 3,650 $ 7,905 April 1,840 $5,520 750 $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 May 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 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) Electrical Occupancy Days Costs High activity level Low activity level Change Variable cost Fixed cost element per occupancy-day + 2. What other factors other than 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 answers and double click the box with the question mark to empty the box for a wrong answers.) Systematic factors like guests, switching off fans and lights Seasonal factors like winter or gummer. Number of days present in a month income taxes paid on hotel income

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_2

Step: 3

blur-text-image_3

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

The Wall Street Mba Your Personal Crash Course In Corporate Finance

Authors: Reuben Advani

3rd Edition

1260135594, 9781260135596

More Books

Students also viewed these Accounting questions