Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Rental Returns 2,380 2,421 2,586 2,725 LO3 (Cost Behavior) Bargain Rental Car offers rental cars in an off-airport location near a major tourist destination

image text in transcribed

Rental Returns 2,380 2,421 2,586 2,725 LO3 (Cost Behavior) 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 Car Wash Costs $10,825 $11,865 $11,332 $12,422 May 2,968 $13,850 June 3,281 $14,419 July 3,353 $14,935 August 3,489 $15,738 September 3,057 $13,563 October 2,876 $11,889 November 2,735 $12,683 December 2,983 $13,796 Required: 1- Using the high-low method, estimate the fixed cost of Car Wash per month and the variable cost of Car Wash per Rental Returns. Round off the fixed cost to the nearest whole dollar and the variable cost to the nearest whole cent. 2- If it is estimated that 4,000 Rental Returns will be run in next month, what is the expected total Car Wash?

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

Cost Accounting Traditions and Innovations

Authors: Barfield Jesse, Raiborn Cecily, Kinney Michael

4th edition

324026455, 978-0324026450

More Books

Students also viewed these Accounting questions

Question

Those which have an established market. LO.1

Answered: 1 week ago