Bargain Rental Car offers rental cars in an off-airport location near a major tourist destination...

60.1K

Verified Solution

Question

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 companys 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 2,380 $ 10,825
February 2,421 $ 11,865
March 2,586 $ 11,332
April 2,725 $ 12,422
May 2,968 $ 13,850
June 3,281 $ 14,419
July 3,353 $ 14,935
August 3,489 $ 15,738
September 3,057 $ 13,563
October 2,876 $ 11,889
November 2,735 $ 12,683
December 2,983 $ 13,796

Using least-squares regression, estimate the fixed cost and variable cost elements of monthly car wash costs. The fixed cost element should be estimated to the nearest dollar and the variable cost element to the nearest cent. (Round Fixed cost to the nearest whole dollar amount and the Variable cost per unit to 2 decimal places.)

Thank you

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Zin AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students