Year ended 12/31/2014 12/31/2013 12/31/2012 12/31/2011 12/31/2010 12/31/2009 12/31/2008 12/31/2007 12/31/2006 12/31/2005 12/31/2004 12/31/2003 12/31/2002 12/31/2001 12/31/2000 12/31/1999 12/31/1998 12/31/1997 12/31/1996 12/31/1995 12/31/1994 12/31/1993
Food and beverage costs: 694,000,000 639,000,000 634,000,000 665,700,000 621,300,000 596,000,000 639,500,000 716,500,000 697,600,000 482,300,000 278,100,000 255,200,000 240,600,000 232,400,000 228,000,000 218,600,000 116,600,000 103,600,000 95,900,000 91,500,000 82,800,000 76,500,000
No of hotel rooms & suites: 39,218 42,200 42,710 42,890 42,010 41,830 39,170 38,130 38,060 43,060 17,220 14,780 14,551 13,598 11,562 11,760 11,685 8,197 6,478 5,736 5,367 5,348
1. Perform a regression analysis using Excel. Use # of hotel rooms & suites as the X and the Food and beverage costs as the Y in your regression analysis.
a. What is the estimated variable food and beverage cost per hotel room/suite?
b. What is the estimated fixed food and beverage cost per hotel room/suite?
c. In your opinion, is the number of hotel rooms and suites a good predictor of Caesars' food and beverage costs? Why or why not?
Compare the estimates of variable and fixed costs calculated using the high-low method to the estimates calculated using the regression method. Which method would most likely provide a better cost estimate? Explain.