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 Occupancy- Days January 540 $ 1,620 February 3,810 $ 8,352 March 4,100 $ 8,736 April 1,730 $ 5,190 May 3,520 $ 7,968 June 1,320 $ 3,960 July 3,420 $ 7,668 August 4,120 $ 8,780 September 1,610 $ 4,830 October 830 $ 2,490 November December 1,420 2,320 $ 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.) Variable cost of electricity per occupancy-day Fixed cost of electricity 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. Electrical Costs Month Occupancy- Days January 540 $ 1,620 February 3,810 $ 8,352 March 4,100 $ 8,736 April 1,730 $ 5,190 May 3,520 $ 7,968 June 1,320 $ 3,960 July 3,420 $ 7,668 August 4,120 $ 8,780 September 1,610 $ 4,830 October 830 $ 2,490 November December 1,420 2,320 $ 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.) Variable cost of electricity per occupancy-day Fixed cost of electricity per month
Chapter1: Financial Statements And Business Decisions
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