Question: Spentz Company offers rental cars in several off airport locations Management

Spentz Company offers rental cars in several off-airport locations. Management would like to better understand the behaviour of the company’s costs. One of these is the cost of cleaning cars. The company operates its own car wash and cleaning facilities 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 cleaning facilities should be related to the number of rental returns. Accordingly, the following data have been compiled:
Using least-squares regression, estimate the fixed cost and variable cost elements of monthly car wash costs. Estimate the fixed cost element to the nearest dollar and the variable cost element to the nearest cent.

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  • CreatedJuly 08, 2015
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