The Cheyenne Hotel in Big Sky, Montana, has accumulated records of the total electrical costs of...

 

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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. Electrical Costs Month Occupancy- Days January 3,410 $ 13,889 February 3,250 $13,008 March 4,470 $ 15,158 April 1,940 $ 8,342 May 1,050 June 450 $ 4,515 $ 1,935 July 3,270 $ 13,094 August 4,510 $ 15,333 September 1,350 $ 5,805 October 1,640 $ 7,052 November 1,860 $ 7,998 December 2,970 $ 12,578 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. Variable cost of electricity Fixed cost of electricity per occupancy-day per month 2. What other factors in addition to occupancy-days are likely to affect the variation in electrical costs from month to 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 3,410 $ 13,889 February 3,250 $13,008 March 4,470 $ 15,158 April 1,940 $ 8,342 May 1,050 June 450 $ 4,515 $ 1,935 July 3,270 $ 13,094 August 4,510 $ 15,333 September 1,350 $ 5,805 October 1,640 $ 7,052 November 1,860 $ 7,998 December 2,970 $ 12,578 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. Variable cost of electricity Fixed cost of electricity per occupancy-day per month 2. What other factors in addition to occupancy-days are likely to affect the variation in electrical costs from month to month?

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