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 Occupancy-Days Electrical Costs January 3,030 $9,044 February 3,080 $9,234 March 3,980 $11,913 April 1,630 $6,194 May 1,270 $4,826 June 2,110 $8,018 July 650 $2,470 August 3,690 $11,552 September 1,960 $7,448 October 4,410 $12,998 November 1,600 $6,080 December 2,230 $8,474 Required: Using the high-low method, estimate the fixed cost of electricity per month and the variable cost of electricity per occupancy day.

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 Occupancy-Days Electrical Costs January 3,030 $9,044 February 3,080 $9,234 March 3,980 $11,913 April 1,630 $6,194 May 1,270 $4,826 June 2,110 $8,018 July 650 $2,470 August 3,690 $11,552 September 1,960 $7,448 October 4,410 $12,998 November 1,600 $6,080 December 2,230 $8,474 Required: Using the high-low method, estimate the fixed cost of electricity per month and the variable cost of electricity per occupancy day.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter3: Cost Behavior

Section: Chapter Questions

Problem 2CE: Corazon Manufacturing Company has a purchasing department staffed by five purchasing agents. Each...

See similar textbooks

Similar questions

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 onie day. The hotel's business is highly seasonal, with peaks occunting during the ski season and in the summer. Honth January February March Aoril May June July August Septenber October Novenber Decenber Occupancy-Davs 4. 260 3.650 3. 160 2.150 2.260 1.450 3. 180 3.750 2.220 3.580 1,690 2.750 Electrical Conts $ 15.002 $ 14,112 $ 13.272 $9.000 $9.432 $6.00 S 19.356 $ 14.532 $9,324 $6.636 $7. 000 $ 11.580 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.) es Variable cost of electricity Fixed cost of electricity per occupancy day per…
7
The Sandhill Acres Inn is trying to determine its break-even point during its off-peak season. The inn has 50 rooms that it rent at $120 a night. Operating costs are as follows: Salaries $5400 per month Utilities $1300 per month Depreciation $1100 per month Maintenance $2520 per month Maid service $33 per room Other costs $63 per room a/ Determine the inn’s break-even point in number of rented rooms per month. b/Determine the inn’s break-even point in dollars.
The Cullumber Acres Inn is trying to determine its break-even point during its off-peak season. The inn has 50 rooms that it rents at $100 a night. Operating costs are as follows: Salaries $7,500 per month Utilities $1,000 per month Depreciation $1,100 per month Maintenance $2,940 per month Maid service $24 per room Other costs $46 per room Determine the inn’s break-even point in number of rented rooms per month. Break-even point enter the break-even point in number of rented rooms rooms Determine the inn’s break-even point in dollars. Break-even point in $enter the break-even point in dollars
The Palmer Acres Inn is trying to determine its break-even point during its off-peak season. The inn has 50 rooms that it rents at $ 55 a night. Operating costs are as follows. Salaries $ 5,100 per month Utilities $ 1,400 per month Depreciation $ 1,100 per month Maintenance $ 1,464 per month Maid service $ 11 per room Other costs $ 22 per room Determine the inn’s break-even point in number of rented rooms per month. Break-even point enter the break-even point in number of rented rooms per month rooms eTextbook and Media Determine the inn’s break-even point in dollars. Break-even point $enter the break-even point in dollars
The Palmer Acres Inn is trying to determine its break-even point during its off-peak season. The inn has 50 rooms that it rents at $ 70 a night. Operating costs are as follows. $ 5,700 per month $ 1,200 per month Salaries Utilities Depreciation $ 1,000 per month Maintenance $ 3,720 per month Maid service $ 14 per room Other costs $ 28 per room Determine the inn's break-even point in number of rented rooms per month. Break-even point rooms LINK Tο ΤΕXT VIDEO: APPLIED SKILLS Determine the inn's break-even point in dollars. Break-even point 2$
The Carla Vista Acres Inn is trying to determine its break-even point during its off-peak season. The inn has 50 rooms that it rents at $40 a night. Operating costs are as follows: Salaries $5,000 per month Utilities $1,100 per month Depreciation $1,200 per month Maintenance $780 per month Maid service $7 per room Other costs $13 per room (A) Determine the inn’s break-even point in number of rented rooms per month. Break-even point enter the break-even point in number of rented rooms rooms (B) Determine the inn’s break-even point in dollars. Break-even point in $enter the break-even point in dollars
The Pharoah Acres Inn is trying to determine its break-even point during its off-peak season. The inn has 50 rooms that it rents at $65 a night. Operating costs are as follows: Salaries Utilities Depreciation Maintenance Maid service Other costs $5,200 per month $1,200 per month $1,300 per month $3,324 per month $13 per room $26 per room Determine the inn's break-even point in number of rented rooms per month. Break-even point eTextbook and Media Determine the inn's break-even point in dollars. Break-even point in 5 rooms
The Sandhill Acres Inn is trying to determine its break-even point during its off - peak season. The inn has 50 rooms that it rents at $120 a night. Operating costs are as follows: Salaries $5,400 per month Property tax $1,300 per month Depreciation (straight-line) $1,100 per month Maintenance $120 per month Maid service $33 per room Other costs $ 63 per room Determine the inn's break-even point in number of rented rooms per month. Break - even point 1584 rooms eTextbook and Media Solution Attempts: 4 of 4 used (b) * Your answer is incorrect. Determine the inn's break- even point in sales dollars. Break-even point in sales. $
Get it
vi.8
Kim Epson operates a full-service car wash, which operates from 8AM to 8 PM seven days a week. The car wash has two stations an automatic washing and drying station that can handle 30 cars per hour and an interior cleaning station that can handle 210 cars per day Based on a recent year-end Neview of operations, Kim estimates that future demand for the interior cleaning station for the seven days of the week, expressed in the average number of cars per day, would be as follows Day Cars Kim Mon 160 Tues 180 Wed 150 Thurs 140 Fri 270 Sat 250 fly instaling additional equipment (at a cost of $30,000) Kim can increase the capacity of the interior cleaning to 300 cars per day Each car wash generates a protax contribution of $1.00 Should Kim install the additional equipment if she expects a pretax payback penod of three years or less? install the additional equipment because the payback period is Sun 250 years (Enter your response rounded to be decimal places)