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 its 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	2,500		$	11,700
February	2,500		$	13,500
March	2,800		$	12,500
April	3,100		$	15,300
May	3,700		$	16,900
June	5,200		$	24,700
July	5,600		$	22,900
August	5,700		$	23,900
September	4,800		$	23,500
October	4,500		$	23,200
November	2,300		$	11,400
December	3,100		$	16,700

Using least-squares regression, estimate the variable cost per rental return and the monthly fixed cost incurred to wash cars. (Round your Fixed cost to the nearest whole dollar amount and the Variable cost per unit to 2 decimal places.)

Answer 1