Discuss the variable cost of electricity per occupancy-day

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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
January 2,620 $5,100
February 580 $1,450
March 4,080 $6,575
April 2,000 $5,000
May 2,880 $5,750
June 1,750 $4,375
July 3,430 $5,965
August 940 $2,350
September 1,570 $3,925
October 4,320 $7,060
November 1,210 $3,025
December 2,740 $5,400

Required:

1. Using the high-low method, estimate the fixed cost of electricity per month and the variable cost of electricity per occupancy-day. (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)

Reference no: EM131813890

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