Using the high low method and the scatteriagram, compute for the fixed and variablcosts, including the variable cost per % ofoccupancy:345in678910111213Month % of occupancy Cost of ElectricityJanFebMarAprMayJun2488RY2025608070652,0002,5003,8005,0004,4004,000

High-low method:-variable cost per unit:- (Highest activity cost - Lowest activity cost) /(Highest…

Answered: Month Jan Feb Mar Apr May Jun % of…

Business

Accounting

Month Jan Feb Mar Apr May Jun % of occupancy Cost of Electricity 2,000 2,500 3,800 5,000 4,400 4,000 20 25 60 80 70 65

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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QUESTION 13 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 occuning during the ski season and in the summer 000 Mush January February March Apri May Jure July August September October November December 3,180 2.920 3,780 2,160 650 2,050 4,050 4,070 1,780 570 $1.80 $1.20 1,580 2,680 $1.00 $0.56 None of the other answers is correct $ 6,510 $ 6.261 $ 7,392 $5.500 $ 1,820 Using the high-low method, the variable cost of electricity per occupancy-day is closest to: $5,261 $ 7,829 $ 7,806 $ 4,984 $ 1,596 $ 4,424 $5,908