View the step-by-step solution to: EZ Rental Car offers rental cars in an off-airport location near

This question was answered on Dec 09, 2011. View the Answer
EZ Rental Car offers rental cars in an off-airport location near a major tourist destination in Florida. Management would like to better understand the behavior of the company’s costs. One of those costs is the cost of washing cars. 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 costs of operating the car wash should be related to the number of rental returns. Accordingly, the following data have been compiled:

Month Rental car wash
returns costs
January 2,310 $ 10,113
February 2,453 $ 12,691
March 2,641 $ 10,905
April 2,874 $ 12,949
May 3,540 $ 15,334
June 4,861 $ 21,455
July 5,432 $ 21,270
August 5,268 $ 19,930
September 4,628 $ 21,860
October 3,720 $ 18,383
November 2,106 $ 9,830
December 2,495 $ 11,081

Required:
Using least-squares regression, estimate the fixed cost and variable cost elements of monthly car wash costs. (Round the "Variable cost per unit" to 2 decimal places and "Fixed cost" to the nearest dollar amount. Omit the "$" sign in your response.)
What is Fixed cost $
What is Variable cost per unit $

2. One of Varic Company’s products goes through a glazing process. The company has observed glazing costs as follows over the last six weeks:

Week Units
Produced Total
Glazing Cost
1 8 $ 270
2 5 $ 200
3 10 $ 310
4 4 $ 190
5 6 $ 240
6 9 $ 290

For planning purposes, the company’s management wants to know the amount of variable glazing cost per unit and the total fixed glazing cost per week.

Required:
Using the least-squares regression method, estimate the variable and fixed elements of the glazing cost. (Round your answers to 2 decimal places. Omit the "$" sign in your response.)

What is Fixed cost $
What is Variable cost per unit $
Express the cost data in (1) above in the form Y = a + bX. (Round your answers to 2 decimal places. Omit the "$" sign in your response.)
Y = ? $ + ? $ X
If the company processes seven units next week, what would be the expected total glazing cost? (Round your intermediate and final answers to 2 decimal places. Omit the "$" sign in your response.)
What isTotal expected cost $
Sign up to view the entire interaction

We can only answer your free 3 questions one at a time. You have two options to get your questions answered:... View the full answer

Why Join Course Hero?

Course Hero has all the homework and study help you need to succeed! We’ve got course-specific notes, study guides, and practice tests along with expert tutors and customizable flashcards—available anywhere, anytime.

-

Educational Resources
  • -

    Study Documents

    Find the best study resources around, tagged to your specific courses. Share your own to gain free Course Hero access or to earn money with our Marketplace.

    Browse Documents
  • 890,990,898

    Question & Answers

    Get one-on-one homework help from our expert tutors—available online 24/7. Ask your own questions or browse existing Q&A threads. Satisfaction guaranteed!

    Ask a Question
  • 890,990,898

    Flashcards

    Browse existing sets or create your own using our digital flashcard system. A simple yet effective studying tool to help you earn the grade that you want!

    Browse Flashcards