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

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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 out 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 $4,127 January 1,736 $4,207 February 1,904 $5,083 March 2,356 April $2,857 960 May

1. Using the high-low method, estimate the fixed cost of electricity per month and the variable cost of electricity per occupancy-day. Round off the fixed cost to the nearest whole dollar and the variable cost to the nearest whole cent.

2. What other factors other than occupancy-days are likely to affect the variation in electrical costs from month to month?

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Related Book For  answer-question

Managerial Accounting

ISBN: 978-0697789938

13th Edition

Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer

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