Question

question 11

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: Rental Month Returns January 2,400 February 2,500 March 2,700 April 3,000 May 3,600 June 5,100 July 5,500 August 5,500 September 4,700 October 4,000 November 2,200 December 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 Exercise 5A-2 Part 1 Required: 1. Prepare a scattergraph plot. (Place car wash costs on the vertical axis and rental returns on the horizontal axis.) Instructions: 1. On the graph below, use the point tool (January) to plot rental returns on the horizontal axis and car wash costs on the vertical axis 2. Repeat the same process for the plotter tools (February to December). 3. To enter exact coordinates, click on the point and enter the values of x and y. 4. To remove a point from the graph, click on the point and select delete option. Januar Car Wash Costs Februa March April June R eums reset

Answer 1

Part 1

Part 2

Result of regression analysis

Intercept gives fixed cost

X variable 1 gives variable cost

Therefore,

Fixed cost per month	$2941
Variable cost per rental return	$3.85