The Cheyenne Hotel in Big Sky, Montana, recorded its total electrical costs and 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 3,350 3,610 1,680 1,230 4,380 1,690 4,130 4,250 1,950 2,140 1,480 2,710 Electrical Costs Variable cost of electricity Fixed cost of electricity $9,241 $9,666 $5,208 $ 3,813 $ 10,428 $ 5,239 $ 10,058 $ 10,125 $6,045 $ 6,634 $4,588 $ 7,829 Required: 1. Using the high-low method, estimate the fixed cost of electricity per month and the variable cost of electricity per occupancy-day. Note: 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, recorded its total electrical costs and 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 3,350 3,610 1,680 1,230 4,380 1,690 4,130 4,250 1,950 2,140 1,480 2,710 Electrical Costs Variable cost of electricity Fixed cost of electricity $9,241 $9,666 $5,208 $ 3,813 $ 10,428 $ 5,239 $ 10,058 $ 10,125 $6,045 $ 6,634 $4,588 $ 7,829 Required: 1. Using the high-low method, estimate the fixed cost of electricity per month and the variable cost of electricity per occupancy-day. Note: 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
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Rahul
![Exercise 5A-1 (Algo) High-Low Method [LO5-10]
The Cheyenne Hotel in Big Sky, Montana, recorded its total electrical costs and 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
3,350
3,610
1,680
1,230
4,380
1,690
4,130
4,250
1,950
2,140
1,480
2,710
Electrical
Costs
Variable cost of electricity
Fixed cost of electricity
$ 9,241
$ 9,666
$5,208
$ 3,813
$ 10,428
$ 5,239
$ 10,058
$ 10, 125
$ 6,045
$ 6,634
$ 4,588
$ 7,829
Required:
1. Using the high-low method, estimate the fixed cost of electricity per month and the variable cost of electricity per occupancy-day.
Note: 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](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F84f895f4-5713-4c7d-863d-956bc38dca5c%2F77e84da3-4ee0-41bb-a47e-2418eb990df1%2F9opasg_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Exercise 5A-1 (Algo) High-Low Method [LO5-10]
The Cheyenne Hotel in Big Sky, Montana, recorded its total electrical costs and 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
3,350
3,610
1,680
1,230
4,380
1,690
4,130
4,250
1,950
2,140
1,480
2,710
Electrical
Costs
Variable cost of electricity
Fixed cost of electricity
$ 9,241
$ 9,666
$5,208
$ 3,813
$ 10,428
$ 5,239
$ 10,058
$ 10, 125
$ 6,045
$ 6,634
$ 4,588
$ 7,829
Required:
1. Using the high-low method, estimate the fixed cost of electricity per month and the variable cost of electricity per occupancy-day.
Note: 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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