EXERCISE 5-4 (20 MINUTES)

2. Electrical costs may reflect seasonal factors other than the just the variation in occupancy days. For example, common areas such as the reception area must be lighted for longer periods during the winter than in the summer. This will result in seasonal fluctuations in the fixed elec-trical costs. Additionally, the fixed costs will be affected by the number of days in a month. In other words, costs like the costs of lighting com-mon areas are variable with respect to the number of days in the month, but are fixed with respect to how many rooms are occupied dur-ing the month. Other, less systematic, factors may also affect electrical costs such as the frugality of individual guests. Some guests will turn off lights when they leave a room. Others will not.

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Solutions Manual, Chapter 5

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