Question

Check my work 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 it 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 Augus September October November December Rental Returns 2.400 2.500 2,800 3,100 3.700 5.100 5,600 5,600 4.700 4,100 2,200 2,900 Car Wash Costs $ 11,300 $ 13,300 $ 12, 100 $ 14,700 $ 16,500 $ 23,900 $ 22.500 $ 22,900 $ 23,100 $ 22.000 $ 11,000 $ 15,300 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. Fixed cost per month Variable cost per rental return < Prev 5 of 9 Next >

Answer 1

Lease - Square method used in statistics for the estimating the value of the variable .With this method two variable can be calculated. There is another method is used for calculating variables known as moving average method.

2) using least square regression the variable cost per rental return and the monthly fixed cast incurred to wash cars is calculated belowin ooooo lets acrume Rental Return be a car wash cost be y e t X x X² xy 2,400 11300 5760,000 27 120,000 2.500 113,300 625 0000 33250000 2,800 112,100 784 0000 33,85 0000 3.100 114,700 1961 oooo 45570.000 3 700 16,500 13 690,000 6105 0.000 si loc 23, 900 26,01 0,000121890,000 15 600 122,500 31360,000 126,000,000 Is 600 22. 900 31360,000 128.240000 4700 23.100 | 22090000 1108570000 220co 44100 1681000e (90200000 | 2,200 1000 4840000 24200,000 2.900 15.3008410,000 44370,000 144,700 208 600 184030,000 844340,000 n = 12 EX= 44,700 Eye 208.600 E220 184030,000 Exy = 844,340,000 Variable cost per rental rental return blis calculated by using the following formula PE = n(exy) - (ER) Eyl onceR2) -(ER2 12 X844340.000 - 44700 x 208,600 12 X 18 40 30 000 - 199 8090.000

3101320 80,000 - 9324420,000 2,208,360,000 - 199 80 90,000 807660,000 210270,000 = 3.84 per mit Ivariable cost per rental return - $ 3.89 Fixed cost per month cal is calculated by using the following formula: a ley)- bcexl a 208, 600 - 62 x 44700 12 ac 208, 600 – 3.84 X 44700 2 a= 208 600 - 171648 12. 9=36952 12 Ta=$3079 Fixed cost per month (a) = $30791