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 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 3,250 $ 9,660
February 3,470 $ 10,185
March 3,660 $ 10,360
April 1,760 $ 6,160
May 1,350 $ 4,725
June 4,350 $ 11,575
July 3,280 $ 9,765
August 1,610 $ 5,635
September 700 $ 2,450
October 1,300 $ 4,550
November 1,640 $ 5,740
December 2,220 $ 7,770
Required:
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.)

Answer 1

Answer:

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Explanation: