Bargain Rental Car offers rental cars in an off-airport location near a major tourist destination...
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Accounting
Bargain Rental Car offers rental cars in an off-airport location near a major tourist destination in California. Management would like to better understand the behavior of the company's costs. One of those costs is the cost of washing cars. The company operates its own car wash facility in which each rental car that is returned is thoroughly cleaned before being released for rental to another customer. Management believes that the costs of operating the car wash should be related to the number of rental returns. Accordingly, the following data have been compiled:
Month
Rental Returns
Car Wash Costs
January
3,214
$21,055
February
2,515
$20,870
March
2,618
$19,630
April
4,861
$21,560
May
2,253
$18,950
June
2,635
$17,418
July
2,545
$10,905
August
3,702
$12,949
September
2,674
$21,200
October
2,254
$10,705
November
2,106
$12,749
December
2,495
$21,453
Required:
Using least-squares regression, estimate the fixed cost and variable cost elements of monthly car wash costs. (Round your fixed cost to the nearest dollar amount and the variable cost element to the nearest cent. Omit the $ sign in your response.)
Fixed cost
$
Variable cost
$
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