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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


 

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: Car Wash Rental Month January Returns Costs 2,500 $ 11,900 February 2,500 $ 13,600 March 2,800 $ 12,700 April 3,100 $ 15,600 May 3,700 $ 17,100 June 5,200 $ 25,100 July 5,600 $ 23,100 August 5,700 $ 24,400 September 4,800 $ 23,700 October 4,500 $ 23,800 November 2,300 $ 11,600 December 3,100 $ 17,400 Exercise 6A-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.) Fixed cost per month Variable cost per rental return

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