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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. Month January February March April May June July August September October November December Occupancy- Days 540 3,810 4,100 1,730 3,520 1,320 3,420 4,120 1,610 830 1,420 2,320 Electrical Costs Variable cost of electricity Fixed cost of electricity $ 1,620 $ 8,352 $ 8,736 $ 5,190 $ 7,968 $ 3,960 $ 7,668 $ 8,780 $ 4,830 $ 2,490 $ 4,260 $ 6,960 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.) per occupancy-day per month

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 January February March April May June July August September October November December Occupancy- Days 540 3,810 4,100 1,730 3,520 1,320 3,420 4,120 1,610 830 1,420 2,320 Electrical Costs Variable cost of electricity Fixed cost of electricity $ 1,620 $ 8,352 $ 8,736 $ 5,190 $ 7,968 $ 3,960 $ 7,668 $ 8,780 $ 4,830 $ 2,490 $ 4,260 $ 6,960 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.) per occupancy-day per month

FINANCIAL ACCOUNTING
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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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 January February March April May June July August September October November December Occupancy- Days 540 3,810 4,100 1,730 3,520 1,320 3,420 4,120 1,610 830 1,420 2,320 Electrical Costs Variable cost of electricity Fixed cost of electricity $ 1,620 $ 8,352 $ 8,736 $ 5,190 $ 7,968 $ 3,960 $ 7,668 $8,780 $ 4,830 $ 2,490 $ 4,260 $ 6,960 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.) per occupancy-day per month
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. Month January February March April May June July August September October November December Occupancy- Days 540 3,810 4,100 1,730 3,520 1,320 3,420 4,120 1,610 830 1,420 2,320 Electrical Costs Variable cost of electricity Fixed cost of electricity $ 1,620 $ 8,352 $ 8,736 $ 5,190 $ 7,968 $ 3,960 $ 7,668 $8,780 $ 4,830 $ 2,490 $ 4,260 $ 6,960 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.) per occupancy-day per month
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