Required information Exercise 5A-2 (Algo) Least-Squares Regression [LO5-11] Skip to question [The following information applies to the questions displayed below.] 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 variable and fixed portions of its car washing costs. 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 variable portion of its car washing costs relates to the number of rental returns. Accordingly, the following data have been compiled: Month Rental Returns Car Wash Costs January 2,400 $ 11,000 February 2,500 $ 13,100 March 2,700 $ 11,800 April 3,000 $ 14,300 May 3,600 $ 16,200 June 5,000 $ 23,300 July 5,500 $ 22,200 August 5,500 $ 22,200 September 4,700 $ 22,800 October 4,000 $ 21,100 November 2,200 $ 10,700 December 2,800 $ 14,200 Exercise 5A-2 Part 2 (Algo) 2. Using least-squares regression, estimate the variable cost per rental return and the monthly fixed cost incurred to wash cars. (Round Fixed cost to the nearest whole dollar amount and the Variable cost per unit to 2 decimal places.)

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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Required information

Exercise 5A-2 (Algo) Least-Squares Regression [LO5-11]

Skip to question

[The following information applies to the questions displayed below.]

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 variable and fixed portions of its car washing costs. 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 variable portion of its car washing costs relates to the number of rental returns. Accordingly, the following data have been compiled:

Month	Rental Returns	Car Wash Costs
January	2,400	$ 11,000
February	2,500	$ 13,100
March	2,700	$ 11,800
April	3,000	$ 14,300
May	3,600	$ 16,200
June	5,000	$ 23,300
July	5,500	$ 22,200
August	5,500	$ 22,200
September	4,700	$ 22,800
October	4,000	$ 21,100
November	2,200	$ 10,700
December	2,800	$ 14,200

Exercise 5A-2 Part 2 (Algo)

2. Using least-squares regression, estimate the variable cost per rental return and the monthly fixed cost incurred to wash cars. (Round Fixed cost to the nearest whole dollar amount and the Variable cost per unit to 2 decimal places.)

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