Required information. Exercise 5A-2 (Algo) Least-Squares Regression [LO5-11) [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 January February March April May June July August September October November December Rental Returns 2,400 2,500 2,800 Fixed cost per month Variable cost per rental return 3,100 3,700 5,100 5,600 5,600 4,800 4,100 2,200 3,000 Car Wash Costs $ 11,400 $ 13,300 $ 12,200 $ 14,900 $ 16,600 $24,100 $ 22,600 $ 23,200 $ 23,200 $ 22,300 $11,100 $ 15,600 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.)
Required information. Exercise 5A-2 (Algo) Least-Squares Regression [LO5-11) [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 January February March April May June July August September October November December Rental Returns 2,400 2,500 2,800 Fixed cost per month Variable cost per rental return 3,100 3,700 5,100 5,600 5,600 4,800 4,100 2,200 3,000 Car Wash Costs $ 11,400 $ 13,300 $ 12,200 $ 14,900 $ 16,600 $24,100 $ 22,600 $ 23,200 $ 23,200 $ 22,300 $11,100 $ 15,600 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.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![Required information
Exercise 5A-2 (Algo) Least-Squares Regression [LO5-11]
[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
January
February
March
April
May
June
July
August
September
October
November
December
Rental
Returns
2,400
2,500
2,800
3,100
Fixed cost per month
Variable cost per rental return i
3,700
5,100
5,600
5,600
4,800
4,100.
2,200
3,000.
Car Wash Costs
$ 11,400
$ 13,300
$ 12,200
$ 14,900
$ 16,600
$ 24,100
$ 22,600
$ 23,200
$ 23,200
$ 22,300
$ 11,100
$ 15,600
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.)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Feb359d07-eca4-4426-9f90-7d97299ce282%2F5e4e491d-3650-423d-9e43-b505f4123fd3%2F7flo5wo_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Required information
Exercise 5A-2 (Algo) Least-Squares Regression [LO5-11]
[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
January
February
March
April
May
June
July
August
September
October
November
December
Rental
Returns
2,400
2,500
2,800
3,100
Fixed cost per month
Variable cost per rental return i
3,700
5,100
5,600
5,600
4,800
4,100.
2,200
3,000.
Car Wash Costs
$ 11,400
$ 13,300
$ 12,200
$ 14,900
$ 16,600
$ 24,100
$ 22,600
$ 23,200
$ 23,200
$ 22,300
$ 11,100
$ 15,600
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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