Question

Help Required information Exercise 5A-2 Least-Squares Regression (L05-11) (The following information applies to the questions displayed below.) Bargain Rental Car offers rental cars in an off-airport location near a malor 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 Car Wash Costs 2,500 $ 11,500 2,500 $ 13,400 2,800 $ 12,300 3,100 $ 15,000 3,700 $ 16,700 5, 100 $ 24,300 5,600 $ 22,700 5,600 $ 23,400 4,800 $ 23,300 4,100 $ 22,600 2,200 $ 11, 200 3,000 $ 16,000 Exercise 5A-2 Part 2 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

Answer 1

Regression Statistics Multiple R 0.946024633 R Square 0.894962607 Adjusted R Square 0.884458868 Standard Error 1763.087236 Observations 12 ANOVA of Regression Residual Total SS 1 2.65E+08 10 31084766 11 2.96E+08 MS F gnificance F 264855234 85.20419 3.29E-06 3108476.603 Intercept X Variable 1 Coefficients andard En 3031.455806 1668.634 3.911611785 0.423765 t Stat P-value Lower 95%U 1.816728748 0.099306 -686.493 € 9.230611622 3.29E-06 2.967404 A) Fixed Cost B) Varaible Cost 3031.46 3.91 Regression Line : Y=a+BX Y=Total Cost , a = Fixed Cost (Interecept), B = Variable cost per unit , X= Production Units