Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

EZ Rental Car offers rental cars in an off-airport location near a major tourist destination in Florida. Management would like to better understand the behavior

EZ Rental Car offers rental cars in an off-airport location near a major tourist destination in Florida. Management would like to better understand the behavior of the companys costs. One of those costs is the cost of washing cars. 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 costs of operating the car wash should be related to the number of rental returns. Accordingly, the following data have been compiled: Month Rental car wash returns costs January 2,310 $ 10,113 February 2,453 $ 12,691 March 2,641 $ 10,905 April 2,874 $ 12,949 May 3,540 $ 15,334 June 4,861 $ 21,455 July 5,432 $ 21,270 August 5,268 $ 19,930 September 4,628 $ 21,860 October 3,720 $ 18,383 November 2,106 $ 9,830 December 2,495 $ 11,081 Required: Using least-squares regression, estimate the fixed cost and variable cost elements of monthly car wash costs. (Round the "Variable cost per unit" to 2 decimal places and "Fixed cost" to the nearest dollar amount. Omit the "$" sign in your response.) What is Fixed cost $ What is Variable cost per unit $ 2. One of Varic Companys products goes through a glazing process. The company has observed glazing costs as follows over the last six weeks: Week Units Produced Total Glazing Cost 1 8 $ 270 2 5 $ 200 3 10 $ 310 4 4 $ 190 5 6 $ 240 6 9 $ 290 For planning purposes, the companys management wants to know the amount of variable glazing cost per unit and the total fixed glazing cost per week. Required: Using the least-squares regression method, estimate the variable and fixed elements of the glazing cost. (Round your answers to 2 decimal places. Omit the "$" sign in your response.) What is Fixed cost $ What is Variable cost per unit $ Express the cost data in (1) above in the form Y = a + bX. (Round your answers to 2 decimal places. Omit the "$" sign in your response.) Y = ? $ + ? $ X If the company processes seven units next week, what would be the expected total glazing cost? (Round your intermediate and final answers to 2 decimal places. Omit the "$" sign in your response.) What isTotal expected cost $

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial And Managerial Accounting

Authors: Charles T Horngren, Jr Walter T Harrison

2nd Edition

0135080193, 9780135080191

More Books

Students also viewed these Accounting questions