High Low Method Problem

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 hotel’s business is highly seasonal, with peaks occurring during the ski season and in the


Occupancy Days Electrical costs
Jan 2604 $6,257.00
Feb 2856 $6,550.00
Mar 3534 $7,986.00
Apr 1440 $4,022.00
May 540 $2,289.00
Jun 1116 $3,591.00
Jul 3162 $7,264.00
Aug 3608 $8,111.00
Sep 1260 $3,707.00
Oct 186 $1,712.00
Nov 1080 $3,321.00
Dec 2046 $5,196.00


1) Using the high / lo method, estimate the fixed cost of electricity per month and the variable cost of electricty 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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