The management of Welcome Hotel is interested in an analysis of the fixed and variable costs in the electricity used relative to hotel occupancy. The following data have been gathered from records for the year:

Required:
(1) Determine the fixed and variable elements of electricity cost using each of the following methods. Round the fixed cost to the nearest dollar and the variable rate to four decimal places.
(a) The method of least squares
(b) The high and low points method
(c) A scatter graph with trend line fitted by inspection
(2) Compute the coefficient of correlation, r, and the coefficient of determination, r2, for guest days and electricity cost.
(3) Compute the standard error of the estimate.
(4) Compute the 90% confidence interval for electricity cost at the 2,000-guest-days capacity.

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Electricity Cost Month Guest Days 1,000 1,500 2,500 3,000 2,500 4,500 6,500 6,000 5,500 3,000 2,500 January $ 400 Feuary 500 500 700 600 800 1,000 900 900 700 600 800 March April May June August.... September October... November December.. Total.. 42,000