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. Electrical Costs Month January Occupancy-Days 2,630 $ 10,783 February 3,130 $ 12,833 March 3,640 $ 13,583 April 1,090 $ 4,469 May June 1,770 $ 7,257 1,730 $ 7,093 July 4,440 $ 14,854 August 3,860 $ 13,815 September 2,170 $ 8,897 October 1,210 $ 4,961 November 1,790 $ 7,339 December 2,930 $ 12,013 Required: 1. 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.) Variable cost of electricity Fixed cost of electricity per occupancy-day per month 2. What other factors in addition to occupancy-days are likely to affect the variation in electrical costs from month to month? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.) Systematic factors like guests, switching off fans and lights. Number of days present in a month. ☐ Income taxes paid on hotel income. ]
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. Electrical Costs Month January Occupancy-Days 2,630 $ 10,783 February 3,130 $ 12,833 March 3,640 $ 13,583 April 1,090 $ 4,469 May June 1,770 $ 7,257 1,730 $ 7,093 July 4,440 $ 14,854 August 3,860 $ 13,815 September 2,170 $ 8,897 October 1,210 $ 4,961 November 1,790 $ 7,339 December 2,930 $ 12,013 Required: 1. 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.) Variable cost of electricity Fixed cost of electricity per occupancy-day per month 2. What other factors in addition to occupancy-days are likely to affect the variation in electrical costs from month to month? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.) Systematic factors like guests, switching off fans and lights. Number of days present in a month. ☐ Income taxes paid on hotel income. ]
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![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.
Electrical
Costs
Month
January
Occupancy-Days
2,630
$ 10,783
February
3,130
$ 12,833
March
3,640
$ 13,583
April
1,090
$ 4,469
May
June
1,770
$ 7,257
1,730
$ 7,093
July
4,440
$ 14,854
August
3,860
$ 13,815
September
2,170
$ 8,897
October
1,210
$ 4,961
November
1,790
$ 7,339
December
2,930
$ 12,013
Required:
1. 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.)
Variable cost of electricity
Fixed cost of electricity
per occupancy-day
per month
2. What other factors in addition to occupancy-days are likely to affect the variation in electrical costs from month to month? (You may
select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and
double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be
automatically graded as incorrect.)
Systematic factors like guests, switching off fans and lights.
Number of days present in a month.
☐ Income taxes paid on hotel income.
]](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F97d38b17-036a-43dc-9e77-1a64dbc148c7%2F1fb54c09-0d1e-453d-a81d-08c64a5a6f08%2F8stlr79_processed.png&w=3840&q=75)
Transcribed Image Text: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.
Electrical
Costs
Month
January
Occupancy-Days
2,630
$ 10,783
February
3,130
$ 12,833
March
3,640
$ 13,583
April
1,090
$ 4,469
May
June
1,770
$ 7,257
1,730
$ 7,093
July
4,440
$ 14,854
August
3,860
$ 13,815
September
2,170
$ 8,897
October
1,210
$ 4,961
November
1,790
$ 7,339
December
2,930
$ 12,013
Required:
1. 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.)
Variable cost of electricity
Fixed cost of electricity
per occupancy-day
per month
2. What other factors in addition to occupancy-days are likely to affect the variation in electrical costs from month to month? (You may
select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and
double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be
automatically graded as incorrect.)
Systematic factors like guests, switching off fans and lights.
Number of days present in a month.
☐ Income taxes paid on hotel income.
]
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