Chapter 6 Homework
Required information
Exercise 6A-2 Least-Squares Regression [LO6-11]
[The following information applies to the questionsdisplayed below.]
Bargain Rental Car offers rental cars in an off-airport locationnear a major tourist destination in California. Management wouldlike to better understand the variable and fixed portions of itscar washing costs. The company operates its own car wash facilityin which each rental car that is returned is thoroughly cleanedbefore being released for rental to another customer. Managementbelieves that the variable portion of its car washing costs relatesto the number of rental returns. Accordingly, the following datahave been compiled:
| Month | Rental Returns | Car Wash Costs |
| January | 2,500 | | $ | 11,900 | |
| February | 2,500 | | $ | 13,600 | |
| March | 2,800 | | $ | 12,700 | |
| April | 3,100 | | $ | 15,600 | |
| May | 3,700 | | $ | 17,100 | |
| June | 5,200 | | $ | 25,100 | |
| July | 5,600 | | $ | 23,100 | |
| August | 5,700 | | $ | 24,400 | |
| September | 4,800 | | $ | 23,700 | |
| October | 4,500 | | $ | 23,800 | |
| November | 2,300 | | $ | 11,600 | |
| December | 3,100 | | $ | 17,400 | |
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Exercise 6A-2 Part 2
2. Using least-squares regression, estimate the variable costper rental return and the monthly fixed cost incurred to wash cars.(Round your Fixed cost to the nearest whole dollar amountand the Variable cost per unit to 2 decimal places.)
