Question

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	Rental Returns		Car Wash Costs
January	2,400		$	11,400
February	2,500		$	13,300
March	2,800		$	12,200
April	3,100		$	14,900
May	3,700		$	16,600
June	5,100		$	24,100
July	5,600		$	22,600
August	5,600		$	23,200
September	4,800		$	23,200
October	4,100		$	22,300
November	2,200		$	11,100
December	3,000		$	15,600

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.)

Answer 1