Question

Required information [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 August September October November December Rental Returns 2,400 2,500 2,700 3,000 3,600 5,100 5,500 5,500 4,700 4,000 2,200 2,800 Car Wash Costs $ 11,100 $ 13,200 $ 11,900 $ 14,400 $ 16,300 $ 23,500 $ 22,300 $ 22,400 $ 22,900 $ 21,400 $ 10,800 $ 14,600 2. Using least-squares regression, estimate the variable cost per rental return and the monthly fixed cost incurred to wash cars. What is the R2 rounded to the nearest whole percentage? (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 R-square

Answer 1

Regression Statistics Multiple R R Square 0.954433339 0.910942999 Adjusted R Square Standard Error Observations 0.902037299 1580.0333 12 ANOVA df Regression Residual Total 1 10 11 SSM 255361614.4 24965052.31 280326666.7 2553 2496 t Intercept X Variable 1 Coefficients 2941.263076 3.852382797 Standard Error 1469.247666 0.380906047 St 2.001 10.11 Fixed cost Per Month Varaibel cost Per rental Return R- Square 2941 3.85 0.91094