! Required information [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 2,500 $ 12,100 February 2,600 $ 13,700 March 2,800 $ 12,900 April 3,200 $ 15,900 May 3,700 $ 17,300 June 5,300 $ 25,500 July 5,600 $ 23,300 August 5,800 $ 24,900 September 4,800 $ 23,900 October 5,200 $ 24,400 November December 2,300 $ 11,800 3,200 $ 18,100 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.) Answer is complete but not entirely correct. Fixed cost per month $ 24X $ Variable cost per rental return 16,729.00
! Required information [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 2,500 $ 12,100 February 2,600 $ 13,700 March 2,800 $ 12,900 April 3,200 $ 15,900 May 3,700 $ 17,300 June 5,300 $ 25,500 July 5,600 $ 23,300 August 5,800 $ 24,900 September 4,800 $ 23,900 October 5,200 $ 24,400 November December 2,300 $ 11,800 3,200 $ 18,100 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.) Answer is complete but not entirely correct. Fixed cost per month $ 24X $ Variable cost per rental return 16,729.00
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter3: Cost Behavior And Cost Forecasting
Section: Chapter Questions
Problem 62P: Cost Behavior, High-Low Method, Pricing Decision Fonseca, Ruiz, and Dunn is a large, local...
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Required information
[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
2,500
$ 12,100
February
2,600
$ 13,700
March
2,800
$ 12,900
April
3,200
$ 15,900
May
3,700
$ 17,300
June
5,300
$ 25,500
July
5,600
$ 23,300
August
5,800
$ 24,900
September
4,800
$ 23,900
October
5,200
$ 24,400
November
December
2,300
$ 11,800
3,200
$ 18,100
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.)
Answer is complete but not entirely correct.
Fixed cost per month
$
24X
$
Variable cost per rental return
16,729.00](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F99ede77f-678e-4c4c-a132-ef026d2d75f9%2Ff9657709-78e8-47aa-a8af-af0ef014b27e%2Fb4hf3of_processed.jpeg&w=3840&q=75)
Transcribed Image Text:!
Required information
[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
2,500
$ 12,100
February
2,600
$ 13,700
March
2,800
$ 12,900
April
3,200
$ 15,900
May
3,700
$ 17,300
June
5,300
$ 25,500
July
5,600
$ 23,300
August
5,800
$ 24,900
September
4,800
$ 23,900
October
5,200
$ 24,400
November
December
2,300
$ 11,800
3,200
$ 18,100
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.)
Answer is complete but not entirely correct.
Fixed cost per month
$
24X
$
Variable cost per rental return
16,729.00
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