High/Low method - Help!
I am having trouble figuring out how exactly I can solve this with the High-low two-point method, I hope anyone can be of any help.
The manager of the Cloud Hotel, desires to know the breakdown of the electrics Costs between variable cost and fixed categories. She provides you with the following information:
|Month||Electric expenses||Occupancy Percentage|
Use the high/low two-point method for:
Determine the variable costs per 1 percent occupancy
Estimate the fixed costs per month.
What is the estimated total electric expense at 62 % occupancy? Why does this differ from the $ 6,200 shown above for January?