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Whitepunk [10]
3 years ago
9

Exercise 6A-1 High-Low Method [LO6-10] The Cheyenne Hotel in Big Sky, Montana, has accumulated records of the total electrical c

osts 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 Occupancy-Days Electrical Costs January 1,736 $ 4,127 February 1,904 $ 4,207 March 2,356 $ 5,083 April 960 $ 2,857 May 360 $ 1,871 June 744 $ 2,696 July 2,108 $ 4,670 August 2,406 $ 5,148 September 840 $ 2,691 October 124 $ 1,588 November 720 $ 2,454 December 1,364 $ 3,529 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.) 2. What other factors in addition to occupancy-days are likely to affect the variation in electrical costs from month to month
Business
1 answer:
Nitella [24]3 years ago
4 0

Answer:

1) variable cost = $1.56 per day

fixed costs = $1,395 per month

2) another aspect that increases or decreases electrical consumption is the weather. During very hot days, more people use the air conditioner, which increases electricity costs. Very cold weather will result in a similar increase in electric consumption.

Explanation:

Month Occupancy-Days Electrical Costs

January 1,736 $ 4,127

February 1,904 $ 4,207

March 2,356 $ 5,083

April 960 $ 2,857

May 360 $ 1,871

June 744 $ 2,696

July 2,108 $ 4,670

<u>August 2,406 $ 5,148 </u>

September 840 $ 2,691

<u>October 124 $ 1,588 </u>

November 720 $ 2,454

December 1,364 $ 3,529

variable cost = (highest activity cost - lowest activity cost) / (highest activity level - lowest activity level) = ($5,148 - $1,588) / (2,406 - 124) = $1.56 per day

fixed costs = $5,148 - ($1.56 x 2,406) = $1,395

 

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Francis Inc.'s stock has a required rate of return of 10.25%, and it sells for $57.50 per share. The dividend is expected to gro
aleksandrvk [35]

Answer:            ke = D1/Po + g

                 0.1025 = D1/57.50 + 0.06

        0.1025-0.06 = D1/57.50

            0.0425     = D1/57.50

                      D1    = 0.0425 x 57.50

                      D1    = $2.444

           

Explanation: Cost of equity is equal to dividend in 1 year's time divided by the current market price plus the growth rate. Other variables were provided in the question except the dividend at the end of the year (D1).

Thus, D1 becomes the subject of the formula. The appropriate cost of equity is $2.44. The correct answer is B.

6 0
3 years ago
On January​ 1, 2017, Walker Sales issued​ $19,000 in bonds for​ $14,300. These are​ eight-year bonds with a stated rate of​ 13%,
AysviL [449]

Answer:

$14,887.5

Explanation:

Carrying Value of the bond is the net of Face value and any amortised discount on the bond.

Face Value of the bond = $19,000

Issuance Value = $14,300

Discount Value = $19,000 - $14,300 = $4,700

This Discount will be amortized over the bond's life until the maturity on straight line basis.

Amortization in each period = $4,700 / (8x2) = $293.75 semiannually

Until December 31, 2017 two payment have been made and $587.5 is amortized in the two semiannual periods.

Un-amortized Discount = $4,700 - $587.5 = $4,112.5

Carrying value of the bond  = Face value - Un-amortized Discount = $19,000 - $4,112.5 = $14,887.5

7 0
3 years ago
The following transactions occurred during a recent year:
Natasha_Volkova [10]

The Company's preliminary Net Income can be determined as $575.

Preliminary net income = Total Revenue - Total Expenses

= $575 ($4,230 - $3,655)

Revenue:

d. Sales Revenue      $680

f. Service Revenue $2,870

i. Service Revenue    $680

Total Revenue      $4,230

Expenses:

a. Wages Expense       $1,700

e. Utilities Expense     $1,360

h. Travel Expense           $115

k. Advertising Expense $480

Total Expenses         $3,655

Thus, the company generated a preliminary net income of $575 for the period.

Learn more about determining net income at brainly.com/question/19850768

6 0
2 years ago
Haynes, Inc. obtained 100 percent of Turner Company's common stock on January 1, 2017, by issuing 10,000 shares of $10 par value
saveliy_v [14]

Answer:

a. $848,000

b. No

Explanation:

a. The calculation of consolidated equipment balance as of December 31, 2018 is shown below:-

Consolidated equipment balance = Equipment balance of Haynes + Equipment balance of Turner + Allocation based on fair value - Depreciation

= $500,000 + $300,000 + $5,000 - (($5,000 ÷ 5 × 2)

= $500,000 + $300,000 + $5,000 - $2,000

= $848,000

2. No it will not affect by the investment method applied by the parent.

6 0
3 years ago
An upcoming convention has secured 300 rooms at $140 per room for Friday night. The rack rate for Friday night is $250 per room
m_a_m_a [10]

Answer:

$67,000

Explanation:

The total revenue will be income from the 300 rooms and that from 100 rooms

=(300 x $140) + ($100 x 250)

=$42,000 +$25,000

=$67,000

6 0
3 years ago
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