Question
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 out for one day. The hotels business is highly seasonal, with peaks occurring during the ski season and in the summer.
Month Occupancy-Days Electrical Costs January ............................................. 1,736 $4,127 February ........................................... 1,904 $4,207 March ................................................ 2,356 $5,083 April .................................................. 960 $2,857 May ................................................... 360 $1,871 June .................................................. 744 $2,696 July ................................................... 2,108 $4,670 August .............................................. 2,406 $5,148 September ........................................ 840 $2,691 October ............................................. 124 $1,588 November ......................................... 720 $2,454 December ......................................... 1,364 $3,529
Using the high-low method:
1- Estimate the fixed cost of electricity per month. Round off the fixed cost to the nearest whole dollar
Using the high-low method:
2- Estimate the variable cost of electricity per occupancy-day. Round off the variable cost to the nearest whole cent.
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