7 The Cheyenne Hotel in Big Sky, Montana, recorded its total electrical costs and number of occupancy-days over the last year. Anoccupancy-day represents a room rented for one day. The hotel's business is highly seasonal, with peaks occurring during the skiseason and in the summer.MonthJanuaryFebruaryMarchAprilMayJuneJulyAugustSeptemberOctoberNovemberDecemberOccupancy-Days2,6205804,0802,0002,8801,7503,4309401,5704,3201,2102,740ElectricalCosts$ 5,100$ 1,450$ 6,575Variable cost of electricityFixed cost of electricity$5,000$ 5,750$ 4,375$ 5,965$ 2,350$ 3,925$7,060$3,025$5,400Required: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 costelement answer to nearest whole dollar amount.per occupancy-dayper month2. What other factors in addition to occupancy-days are likely to affect the variation in electrical costs from month to month?Note: You may select more than one answer. Single click the box with the question mark to produce a check mark for a correctanswer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a questionmark will be automatically graded as incorrect.

Lets understand the basics.High-low method is a cost accounting method to separate variable cost per…

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 Required: Occupancy- Days 2,620 580 4,080 2,000 2,880 1,750 3,430 940 1,570 4,320 1,210 2,740 Electrical Costs $ 5,100 $1,450 $ 6,575 $5,000 $5,750 $ 4,375 $5,965 $ 2,350 $3,925 $7,060 $3,025 $ 5,400

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 Required: Occupancy- Days 2,620 580 4,080 2,000 2,880 1,750 3,430 940 1,570 4,320 1,210 2,740 Electrical Costs $ 5,100 $1,450 $ 6,575 $5,000 $5,750 $ 4,375 $5,965 $ 2,350 $3,925 $7,060 $3,025 $ 5,400

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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