Using the high-low method estimate the fixed cost of

Reference no: EM13390712

The Edelweiss Hotel in Vail, Colorado, 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 hotels business is highly seasonal, with peaks occurring during the ski season and in the summer.

Month Occupancy Days Electrical Cost

Jan 2604 $6257

Feb 2856 $6550

March 3534 $7986

April 1440 $4022

May 540 $2289

June 1116 $3591

July 3162 $7264

August 3608 $8111

September 1260 $3707

October 186 $1712

November 1080 $3321

December 2046 $5196

Required:

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.

Reference no: EM13390712

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