Introduction to Managerial Accounting - Connect Access
8th Edition
ISBN: 9781260519020
Author: BREWER
Publisher: MCG
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Textbook Question
Chapter 6.A, Problem 1E
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 for one day. The hotels business is highly seasonal, with peaks occurringduring the ski season and in the summer.
Required:
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 in addition to occupancy-days are likely to affect the variation in electrical costs from month to month?
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The Cheyenne Hotel in Big Sky, Montana, recorded its total electrical costs and number of occupancy-days over the last year. An
occupancy-day represents a room rented for one day. The hotel's business is highly seasonal, with peaks occurring during the ski
season and in the summer.
Month
January
February
March
April
May
June
July
August
September
October
November
December
Occupancy-
Days
3,250
3,470
3,660
1,760
1,350
4,350
3,280
1,610
700
1,300
1,640
2,220
Electrical
Costs
$ 9,660
$ 10,185
$ 10,360
$ 6,160
$ 4,725
$ 11,575
$ 9,765
$ 5,635
$ 2,450
$ 4,550
$5,740
$ 7,770
Required:
1. Using the high-low method, estimate the fixed cost of electricity per month and the variable cost of electricity per occupancy-day.
Note: 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.
Variable cost of electricity
Fixed cost of electricity
X Answer is complete but not entirely correct.
$ 3.50 x per…
The Cheyenne Hotel in Big Sky, Montana, has accumulated records of the total electrical costs of the hoteland the number of occupancy-days over the last year. An occupancy-day represents a room rented out for oneday. The hotel’s business is highly seasonal, with peaks occurring during the ski season and in the summer.Month Occupancy-Days Electrical CostsJanuary ..................... 1,736 $4,127February .................... 1,904 $4,207March ........................ 2,356 $5,083April ........................... 960 $2,857May ........................... 360 $1,871June .......................... 744 $2,696July ............................ 2,108 $4,670August ....................... 2,406 $5,148September ................ 840 $2,691October ..................... 124 $1,588November ................. 720 $2,454December ................. 1,364 $3,529Required:1. Using the high-low method, estimate the fixed cost of electricity per month and the variable cost ofelectricity per occupancy-day.…
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 for one day. The hotel's business is highly seasonal,
with peaks occurring during the ski season and in the summer.
Month
January
February
March
April
May
June
July
August
September
October
November
December
Occupancy-
Days
2,630
3,130
3,640
1,090
1,770
1,730
4,440
3,860
2,170
1,210
1,790
2,930
Electrical
Costs
$ 10,783
$ 12,833
$ 13,583
$ 4,469
Variable cost of electricity
Fixed cost of electricity
$ 7,257
$ 7,093
$ 14,854
$ 13,815
$8,897
$ 4,961
$ 7,339
$ 12,013
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.)
per occupancy-day
per…
Chapter 6 Solutions
Introduction to Managerial Accounting - Connect Access
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Ch. 6.A - Mixed Cost Analysis and the Relevant Range LOS-10...Ch. 6.A - Prob. 12PCh. 6 - What is the meaning of contribution margin ratio?...Ch. 6 - Prob. 2QCh. 6 - In all respects, Company A and Company B are...Ch. 6 - What is the meaning of operating leverage?Ch. 6 - What is the meaning of break-even point?Ch. 6 - In response to a request from your immediate...Ch. 6 - What is the meaning of margin of safety?Ch. 6 - Prob. 8QCh. 6 - Explain how a shift in the sales mix could result...Ch. 6 - The Excel worksheet form that appears be1o is to...Ch. 6 - The Excel work sheet from that appears below is to...Ch. 6 - Prob. 3AECh. 6 - The Excel worksheet form that appears be1o is to...Ch. 6 - Prob. 5AECh. 6 - Oslo Company prepared the following contribution...Ch. 6 - Oslo Company prepared the following contribution...Ch. 6 - Oslo Company prepared the following contribution...Ch. 6 - Oslo Company prepared the following contribution...Ch. 6 - Oslo Company prepared the following contribution...Ch. 6 - Oslo Company prepared the following contribution...Ch. 6 - Oslo Company prepared the following contribution...Ch. 6 - Oslo Company prepared the following contribution...Ch. 6 - Oslo Company prepared the following contribution...Ch. 6 - Oslo Company prepared the following contribution...Ch. 6 - Prob. 11F15Ch. 6 - Oslo Company prepared the following contribution...Ch. 6 - Oslo Company prepared the following contribution...Ch. 6 - Oslo Company prepared the following contribution...Ch. 6 - Oslo Company prepared the following contribution...Ch. 6 - The Effect of Cha noes ¡n Activity on Net...Ch. 6 - Prob. 2ECh. 6 - Prepare a Profit Graph L062 Jaffre Enterprises...Ch. 6 - Computing and Using the CM Ratio L063 Last month...Ch. 6 - Changes in Venable Costs, Fixed Costs, Selling...Ch. 6 - Prob. 6ECh. 6 - Lin Corporation has a single product 1ose selling...Ch. 6 - Compute the Margin of Safety LO6-7 Molander...Ch. 6 - Compute and Use the Degree 01 Operating Leverage...Ch. 6 - Prob. 10ECh. 6 - Missing Data; Basic CVP Concepts L061, L069 Fill...Ch. 6 - Prob. 12ECh. 6 - Change in selling price, Sales Volume, Variable...Ch. 6 - Prob. 14ECh. 6 - Operating Leverage 1061. 1068 Magic Realm, Inc.,...Ch. 6 - Prob. 16ECh. 6 - Break-Even and Target Profit Analysis 1064, 1066,...Ch. 6 - Break-Even and Target Profit Analysis; Margin of...Ch. 6 - Prob. 19PCh. 6 - Prob. 20PCh. 6 - Prob. 21PCh. 6 - Prob. 22PCh. 6 - CVP Applications; Contribution Margin Ratio:...Ch. 6 - Break-Even and Target Profit Analysis LO6-6, L066...Ch. 6 - Prob. 25PCh. 6 - Prob. 26PCh. 6 - Prob. 27PCh. 6 - Sales Mix; Commission Structure; Multiproduct...Ch. 6 - Changes in Cost Structure; Break-Even Analysis;...Ch. 6 - Graphing; Incremental Analysis; Operating Leverage...Ch. 6 - Interpretive Questions on the CVP Graph L062, L065...
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- The Cheyenne Hotel in Big Sky, Montana, recorded its total electrical costs and number of occupancy-days over the last year. An occupancy-day represents a room rented for one day. The hotel's business is highly seasonal, with peaks occurring during the ski season and in the summer. Month January February March April May June July August September October November December Occupancy-Days 3,180 2,920 3,780 2,160 650 2,050 4,050 4,070 1,780 570 1,580 2,680 Electrical Costs $ 6,510 $ 6,261 Variable cost of electricity Fixed cost of electricity $ 7,392 $ 5,569 $ 1,820 $ 5,261 $ 7,829 $ 7,896 $ 4,984 $ 1,596 $ 4,424 $ 5,908 Required: 1. Using the high-low method, estimate the fixed cost of electricity per month and the variable cost of electricity per occupancy-day. Note: 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. per occupancy-day per month 2. What other factors in addition to…arrow_forwardThe Cheyenne Hotel in Big Sky, Montana, recorded its total electrical costs and number of occupancy-days over the last year. An occupancy-day represents a room rented for one day. The hotel's business is highly seasonal, with peaks occurring during the ski season and in the summer. Month January February March April May June July August September October November December Occupancy- Days 2,830 3,340 3,650 1,840 750 1,830 3,890 1,700 4,060 2,260 1,350 290 Electrical Costs Variable cost of electricity Fixed cost of electricity $ 6,750 $ 7,410 $ 7,905 $ 5,520 $ 2,250 $ 5,490 $ 8,190 $ 5,100 $ 8,410 $ 6,780 $ 4,050 $ 870 Required: 1. Using the high-low method, estimate the fixed cost of electricity per month and the variable cost of electricity per occupancy-day. Note: 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. per occupancy-day per month 2. What other factors in addition to…arrow_forwardThe 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 for one day. The hotel's business is highly seasonal, with peaks occurring during the ski season and in the summer. Month January February March April May June July August September October November December Occupancy- Days 3,240 3,060 1,150 2,260 4,310 1,270 3,410 640 1,310 3,760 1,330 2,570 Electrical Costs $ 8,622 $ 8,228 Variable cost of electricity Fixed cost of electricity $ 3,910 $ 7,684 $ 10,984 $ 4,318 $ 9,418 $ 2,176 $ 4,454 $ 9,738 $ 4,522 $7,868 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.) Answer is complete but not…arrow_forward
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