Managerial Accounting
17th Edition
ISBN: 9781260247787
Author: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer
Publisher: RENT MCG
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Chapter 5.A, Problem 2E
EXERCISE 5A-2 Least-Squares Regression LO5-11
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:
Required:
- Prepare a scattergraph plot. (Place car wash costs on the vertical axis and rental returns on the horizontal axis.)
- Using least-squares regression, estimate the variable cost per rental return and the monthly fixed cost incurred to wash cars. The total fixed cost should be estimated to file nearest dollar and the variable cost per rental return to the nearest cent.
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Required information
Exercise 5A-2 (Algo) Least-Squares Regression [LO5-11]
[The following information applies to the questions displayed below.]
Bargain Rental Car wants to better understand the variable and fixed portions of its car washing costs. The company
operates its own car wash facility that cleans each rental car before releasing it to another customer. Management
believes the variable portion of its car washing costs relates to the number of rental returns. Accordingly, the following
data have been compiled:
Month
January
February
March
April
May
June
July
August
September
October
November
December
Rental
Returns
2,500
2,500
2,800
3,100
3,700
5,100
5,600
5,600
4,800
4,100
Fixed cost per month
Variable cost per rental return
2,200
3,000
Car Wash Costs
$ 11,500
$ 13,400
$ 12,300
$ 15,000
$ 16,700
$ 24,300
$ 22,700
$ 23,400
$ 23,300
$ 22,600
$ 11, 200
$ 16,000
Exercise 5A-2 Part 2 (Algo)
2. Using least-squares regression, estimate the variable cost per rental return and the…
Required information
Exercise 5A-2 (Algo) Least-Squares Regression [LO5-11]
[The following information applies to the questions displayed below.]
Bargain Rental Car wants to better understand the variable and fixed portions of its
car washing costs. The company operates its own car wash facility that cleans each
rental car before releasing it to another customer. Management believes the variable
portion of its car washing costs relates to the number of rental returns. Accordingly,
the following data have been compiled:
Month
January
February
March
April
May
June
July
August
September
October
November
December
Rental
Returns
2,400
2,500
2,800
3,100
3,700
5,100
5,600
5,600
4,700
4,100
2,200
2,900
Exercise 5A-2 Part 2 (Algo)
Car Wash Costs.
$ 11,300
$ 13,300
$ 12,100
$ 14,700
$ 16,500
$ 23,900
$ 22,500
$ 22,900
$ 23,100
$ 22,000
$ 11,000
$ 15,300
2. Using least-squares regression, estimate the variable cost per rental return and the monthly fixed
cost incurred to wash cars.
Note: Round…
Required information
Exercise 5A-2 (Algo) Least-Squares Regression [LO5-11]
[The following information applies to the questions displayed below.]
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
January
February
March
April
May
June
July
August
September
October
November
December
Rental
Returns
2,400
2,500
2,800
3,100
Fixed cost per month
Variable cost per rental return i
3,700
5,100
5,600
5,600
4,800
4,100.
2,200
3,000.
Car Wash Costs
$ 11,400
$ 13,300
$ 12,200
$ 14,900
$ 16,600
$ 24,100
$…
Chapter 5 Solutions
Managerial Accounting
Ch. 5.A - EXERCISE 5A-1 High-Low Method LO5-10 The Cheyenne...Ch. 5.A - EXERCISE 5A-2 Least-Squares Regression LO5-11...Ch. 5.A - EXERCISE 5A-3 Cost Behavior; High-Low Method...Ch. 5.A - Prob. 4ECh. 5.A - EXERCISE 5A-5 Least-Squares Regression LO5-11...Ch. 5.A - Prob. 6PCh. 5.A - Problem 5A-7 Cost Behavior; High-Low Method;...Ch. 5.A - Problem 5A-8 High-Low Method; Predicting Cost...Ch. 5.A - Prob. 9PCh. 5.A - Prob. 10P
Ch. 5.A - Case 5A-11 Mixed Cost Analysis and the Relevant...Ch. 5.A - CASE 5A-12 Analysis of Mixed Costs in a Pricing...Ch. 5 - Prob. 1QCh. 5 - Often the most direct route to a business decision...Ch. 5 - Prob. 3QCh. 5 - What is the meaning of operating leverage?Ch. 5 - What is the meaning of break-even point?Ch. 5 - 5-6 In response to a request from your immediate...Ch. 5 - Prob. 7QCh. 5 - Prob. 8QCh. 5 - Prob. 9QCh. 5 - Prob. 1AECh. 5 - Prob. 2AECh. 5 - Prob. 3AECh. 5 - Prob. 4AECh. 5 - Prob. 5AECh. 5 - Prob. 1F15Ch. 5 - Prob. 2F15Ch. 5 - Prob. 3F15Ch. 5 - Prob. 4F15Ch. 5 - Prob. 5F15Ch. 5 - Prob. 6F15Ch. 5 - Prob. 7F15Ch. 5 - Prob. 8F15Ch. 5 - Prob. 9F15Ch. 5 - Prob. 10F15Ch. 5 - Prob. 11F15Ch. 5 - Prob. 12F15Ch. 5 - Prob. 13F15Ch. 5 - Prob. 14F15Ch. 5 - Prob. 15F15Ch. 5 - Prob. 1ECh. 5 - Prob. 2ECh. 5 - Prob. 3ECh. 5 - Prob. 4ECh. 5 - Prob. 5ECh. 5 - Prob. 6ECh. 5 - Prob. 7ECh. 5 - Prob. 8ECh. 5 - Prob. 9ECh. 5 - EXERCISE 5-10 Multiproduct Break-Even Analysis...Ch. 5 - Prob. 11ECh. 5 - EXERCISE 5-12 Multiproduct Break-Even Analysis...Ch. 5 - EXERCISE 5-13 Changes in Selling Price, Sales...Ch. 5 - Prob. 14ECh. 5 - Prob. 15ECh. 5 - Prob. 16ECh. 5 - Prob. 17ECh. 5 - Prob. 18ECh. 5 - Prob. 19PCh. 5 - PROBLEM 5-20 CVP Applications: Break-Even...Ch. 5 - PROBLEM 5-21 Sales Mix; Multiproduct Break-Even...Ch. 5 - Prob. 22PCh. 5 - Prob. 23PCh. 5 - Prob. 24PCh. 5 - Prob. 25PCh. 5 -
PROBLEM 5-26 CVP Applications; Break-Even...Ch. 5 - Prob. 27PCh. 5 - Prob. 28PCh. 5 - Prob. 29PCh. 5 - Prob. 30PCh. 5 -
PROBLEM 5-31 Interpretive Questions on the CVP...Ch. 5 - Prob. 32C
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