The management of Charlene Mountain Hotel is interested in the analysisof the fixed and variable costs in the electricity used in its relationship to hoteloccupancy. The data shown below have been gathered from the books andrecords in its first six months of 2020:Guestdays1,000Costs2020 JanuaryFebruaryMarchAprilMayP4,0001,5005,0002,5003,0002,5004,5005,0007,0006,000June8,000REQUIRED:1. Split the cost of electricity into its fixed and variable components, using thescattergraph method. Compute the variable rate up to 5 decimals; roundtotals upward to nearest peso.2. If the hotel expects in the next quarter about only 5,000 guestdays, how muchcost of electricity is expected to be incurred for this period?

To compute the fixed and variable component using the scattergraph method, first, we need to create…

mahagement of Charlene Mountain Hotel is interested in the analysis of the fixed and variable costs in the electricity used in its relationship to hotel occupancy. The data shown below have been gathered from the books and records in its first six months of 2020: Guestdays 2020 January February Costs P4,000 1,000 1,500 5,000 March 2,500 5,000 April May 3,000 2,500 7,000 6,000 June 4,500 8,000 REQUIRED: 1. Split the cost of electricity into its fixed and variable components, using the scattergraph method. Compute the variable rate up to 5 decimals; round totals upward to nearest peso. 2. If the hotel expects in the next quarter about only 5,000 guestdays, how much cost of electricity is expected to be incurred for this period?

mahagement of Charlene Mountain Hotel is interested in the analysis of the fixed and variable costs in the electricity used in its relationship to hotel occupancy. The data shown below have been gathered from the books and records in its first six months of 2020: Guestdays 2020 January February Costs P4,000 1,000 1,500 5,000 March 2,500 5,000 April May 3,000 2,500 7,000 6,000 June 4,500 8,000 REQUIRED: 1. Split the cost of electricity into its fixed and variable components, using the scattergraph method. Compute the variable rate up to 5 decimals; round totals upward to nearest peso. 2. If the hotel expects in the next quarter about only 5,000 guestdays, how much cost of electricity is expected to be incurred for this period?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Question

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The management of Charlene Mountain Hotel is interested in the analysis
of the fixed and variable costs in the electricity used in its relationship to hotel
occupancy. The data shown below have been gathered from the books and
records in its first six months of 2020:
Guestdays
1,000
Costs
2020 January
February
March
April
May
P4,000
1,500
5,000
2,500
3,000
2,500
4,500
5,000
7,000
6,000
June
8,000
REQUIRED:
1. Split the cost of electricity into its fixed and variable components, using the
scattergraph method. Compute the variable rate up to 5 decimals; round
totals upward to nearest peso.
2. If the hotel expects in the next quarter about only 5,000 guestdays, how much
cost of electricity is expected to be incurred for this period?

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