Northlake Nordic Centre Inc.’s snowmaking-and-hydro cost by month: November 4,000 skier-days, 38,000; December 6,000, 46,000; January 9,000, 58,000; February 8,000, 59,000; March 3,000, $34,000. Use the high-low method to separate the cost and estimate it at 7,000 skier-days.

Answer

Variable cost per skier-day → 4 · Fixed cost per month → 22000 · Fixed cost checked at the low point → 22000 · Estimated cost at 7,000 skier-days → 50000

Cells - Variable cost per skier-day · ±0.005 - Fixed cost per month · ±0 - Fixed cost checked at the low point · ±0 - Estimated cost at 7,000 skier-days · ±0 High activity January (9,000; 58,000), low activity March (3,000; 34,000) — not February. Slope = (58,000 − 34,000) ÷ (9,000 − 3,000) = **4.00**. Fixed = 58,000 − 4.00 × 9,000 = **22,000**; at March 34,000 − 4.00 × 3,000 = **22,000** ✓. At 7,000: 22,000 + 4.00 × 7,000 = **50,000**. Excel: `=SLOPE({58000,34000},{9000,3000})`, `=INTERCEPT(...)`.

OpenStax Managerial Accounting §2.3 (the pick-by-activity rule and the check); Hermanson Vol 2 ch 21 (high-low on a non-monotone table) (concept map I8, I9)