Brief Exercise 1-4

High-Low Method Cheyenne Hotel Month January February March April May June July August September October November December Occupancy Days 2,604 2,856 3,534 1,440 540 1,116 3,162 3,608 1,260 186 1,080 2,046 Electrical Costs $ 6,257 $ 6,550 $ 7,986 $ 4,022 $ 2,289 $ 3,591 $ 7,264 $ 8,111 $ 3,707 $ 1,712 $ 3,321 $ 5,196

Using the high-low method, estimate the fixed cost of electricity per month and the varied cost of electricity per occupancy d 1. Occupancy Days Electrical Costs
High Low Change 3,534 186 $ 7,986 $ 1,712

Variable cost per occupany= (y2-y1)/(x2x1)

(7986-1712)/(3534-186)

1.873955 or 79861.87*(353 4)

Total Fixed Cost = y2 bx2 = y1 bx1

ectrical Costs

ectricity per occupancy day. Round off the fixed cost to the nearest whole dollar and the variable cost to the nearest whole cent

ectrical Costs

$1.87/occ upancy

1377.42

$1,377

o the nearest whole cent