The Cheyenne Hotel in Big Sky, Montana, has accumulated cost records of the total electrical costs...
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The Cheyenne Hotel in Big Sky, Montana, has accumulated cost 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 out for one day.) The hotel's business is highly seasonal, with peaks occurring during the ski season and the summer. January February March April May June July August September October November December Occupancy Days 1,736 1,904 2,356 960 360 744 2,108 2,406 840 124 720 1,364 Electrical Costs $4,127 $4,207 $5,083 $2,857 $1,871 $2,696 $4,670 $5,148 $2,691 $1,588 $2,454 $3,529 Required: 1. Use the high-low method, calculate the mixed cost formula to break out electrical costs into its fixed and variable components. 2. Use the regression formulas we used in class to calculate the mixed cost formula to break out electrical costs into its fixed and variable components. The Cheyenne Hotel in Big Sky, Montana, has accumulated cost 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 out for one day.) The hotel's business is highly seasonal, with peaks occurring during the ski season and the summer. January February March April May June July August September October November December Occupancy Days 1,736 1,904 2,356 960 360 744 2,108 2,406 840 124 720 1,364 Electrical Costs $4,127 $4,207 $5,083 $2,857 $1,871 $2,696 $4,670 $5,148 $2,691 $1,588 $2,454 $3,529 Required: 1. Use the high-low method, calculate the mixed cost formula to break out electrical costs into its fixed and variable components. 2. Use the regression formulas we used in class to calculate the mixed cost formula to break out electrical costs into its fixed and variable components.
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Lets first calculate the fixed and variable components of the electrical costs using the highlow met... View the full answer
Related Book For
Managerial Accounting
ISBN: 978-1259307416
16th edition
Authors: Ray Garrison, Eric Noreen, Peter Brewer
Posted Date:
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