Bargain Rental Car offers rental cars in an off-airport location near a major tourist destination in California. Managementwould like to better understand the variable and fixed portions of its car washing costs. The company operates its owncar wash facility in which each rental car that is returned is thoroughly cleaned before being released for rental toanother customer. Management believes that the variable portion of its car washing costs relates to the number ofrental returns. Accordingly, the following data have been compiled:MonthRental ReturnsCar Wash Costs$ 11,500$ 13,400$ 12,300$ 15,000$ 16,700$ 24,300$ 22,700$ 23,400$ 23,300$ 22,600$ 11,200$ 16,000JanuaryFebruary2,5002,500MarchAprilMayJuneJulyAugustSeptemberOctober2,8003,1003,7005,1005,6005,6004,8004,1002,2003,000NovemberDecember2. Using least-squares regression, estimate the variable cost per rental return and the monthly fixed cost incurred to wash cars. (RoundFixed cost to the nearest whole dollar amount and the Variable cost per unit to 2 decimal places.)

Variable costs are those costs which costs whose value changes due to change in the level of…

Answered: Bargain Rental Car offers rental cars…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Electronics is a manufacturer with two departments: Computer Chips and Cell Phones. The computer chip that is produced in the Chips Department can be sold to customers at $5.75 per chip. The costs associated with the computer chips are as follows: Option for Req 1 is Should or should not Req 2 is Higher or lower and should or should not
Tannin Products Inc. prepared the following factory overhead cost budget for the Trim Department for July of the current year, during which it expected to use 14,000 hours for production: Variable overhead cost: Indirect factory labor $44,800 Power and light 10,360 Indirect materials 21,000 Total variable overhead cost $ 76,160 Fixed overhead cost: Supervisory salaries $54,380 Depreciation of plant and equipment 14,310 Insurance and property taxes 26,710 Total fixed overhead cost 95,400 Total factory overhead cost $171,560 Tannin has available 18,000 hours of monthly productive capacity in the Trim Department under normal business conditions. During July, the Trim Department actually used 13,000 hours for production. The actual fixed costs were as budgeted. The actual variable overhead for July was as follows: Actual variable factory overhead cost: Indirect factory labor $40,560…
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