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(Solved) (Latest ver. Aug 2020) - least-squares regression for Hertz Rental Cars

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24.Hertz 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 has been compiled:

MonthRental
ReturnsCar Wash
Costs
January2,310$10,113
February2,453$12,691
March2,641$10,905
April2,874$12,949
May3,540$15,334
June4,861$21,455
July5,432$21,270
August5,268$19,930
September4,628$21,860
October3,720$18,383
November2,106$9,830
December2,495$11,081

Using least-squares regression, estimate the fixed cost and variable cost elements of monthly car wash costs and calculate R2. The fixed cost element should be estimated to the nearest dollar and the variable cost element to the nearest cent. Express your cost formula in the form Y = a + bX.

 







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