Homework Help is Here – Start Your Trial Now!
Business
Accounting
Required: 1. Determine the amount of difference in the customer's bill from the prior month and from the current month last year. (Negative amounts should be indicated with minus sign. Round your answers to 2 decimal places.)

Required: 1. Determine the amount of difference in the customer's bill from the prior month and from the current month last year. (Negative amounts should be indicated with minus sign. Round your answers to 2 decimal places.)

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
icon
Concept explainers
Question
i need the answer quickly
For several years many utilities have employed regression analysis to forecast monthly utility usage by residential customers using weather forecasts, the number of holidays, the number of days in the month, and other factors. For example, the Connecticut Department of Public Utility Control (CDPUC) has determined that regression, properly used, can accurately predict natural gas usage. Most public gas utilities serving Connecticut have reported levels of accuracy from 4% to 10% using regression. One company, Dominion Natural Gas Company of Ohio, uses this approach not to forecast but to explain to customers why their natural gas bills have gone up or down compared to the prior month, and also compared to the same month of the prior year. The bill shows total MCF (thousand cubic feet of natural gas) used by the customer for that month and why the total MCF usage has changed, based on three factors: 1. Change in temperature: each degree increase in temperature causes an increase in the number of MCFs consumed. The relationship between the change in temperature and the usage of MCF is not linear, but the monthly bill shows the average change in temperature for the month and the increase or decrease in MCF related to that change. 2. Number of billing days in the period. 3. The residual, the change in usage by the customer that is not attributable to temperature or the number of days in the billing period. A customer of Dominion has used 13.7 MCF in December and is charged $12.50 per MCF for a total bill that month of $171.25. The following data are available to compare the current month's weather and billing period to the prior month and to the same month last year: Usage Factors Weather Number of billing days Customer-controlled usage Current Month vs. Last Month 3 degrees cooler; +2.5 MCF 5 more days; +0.5 MCF +.9 MCF Current Month to Last December 8 degrees warmer; -3.5 MCF 1 less day; -0.1 MCF -1.8 MCF Required: 1. Determine the amount of difference in the customer's bill from the prior month and from the current month last year. (Negative amounts should be indicated with minus sign. Round your answers to 2 decimal places.) Usage Factors Current Month vs. Last Month $ Amount Change Current Month vs. Last December $ Amount Change Weather Number of billing days Customer-controlled usage Total change 3 degrees cooler; +2.5 MCF 5 more days; +0.5 MCF +0.9 MCF 8 degrees warmer; -3.5 MCF 1 less day; -0.1 MCF -1.8 MCF
Transcribed Image Text:For several years many utilities have employed regression analysis to forecast monthly utility usage by residential customers using weather forecasts, the number of holidays, the number of days in the month, and other factors. For example, the Connecticut Department of Public Utility Control (CDPUC) has determined that regression, properly used, can accurately predict natural gas usage. Most public gas utilities serving Connecticut have reported levels of accuracy from 4% to 10% using regression. One company, Dominion Natural Gas Company of Ohio, uses this approach not to forecast but to explain to customers why their natural gas bills have gone up or down compared to the prior month, and also compared to the same month of the prior year. The bill shows total MCF (thousand cubic feet of natural gas) used by the customer for that month and why the total MCF usage has changed, based on three factors: 1. Change in temperature: each degree increase in temperature causes an increase in the number of MCFs consumed. The relationship between the change in temperature and the usage of MCF is not linear, but the monthly bill shows the average change in temperature for the month and the increase or decrease in MCF related to that change. 2. Number of billing days in the period. 3. The residual, the change in usage by the customer that is not attributable to temperature or the number of days in the billing period. A customer of Dominion has used 13.7 MCF in December and is charged $12.50 per MCF for a total bill that month of $171.25. The following data are available to compare the current month's weather and billing period to the prior month and to the same month last year: Usage Factors Weather Number of billing days Customer-controlled usage Current Month vs. Last Month 3 degrees cooler; +2.5 MCF 5 more days; +0.5 MCF +.9 MCF Current Month to Last December 8 degrees warmer; -3.5 MCF 1 less day; -0.1 MCF -1.8 MCF Required: 1. Determine the amount of difference in the customer's bill from the prior month and from the current month last year. (Negative amounts should be indicated with minus sign. Round your answers to 2 decimal places.) Usage Factors Current Month vs. Last Month $ Amount Change Current Month vs. Last December $ Amount Change Weather Number of billing days Customer-controlled usage Total change 3 degrees cooler; +2.5 MCF 5 more days; +0.5 MCF +0.9 MCF 8 degrees warmer; -3.5 MCF 1 less day; -0.1 MCF -1.8 MCF
Expert Solution
steps

Step by step

Solved in 3 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Receivables Management
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS