! Required information [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 Rental Returns Car Wash Costs January 2,500 $ 12,100 February 2,600 $ 13,700 March 2,800 $ 12,900 April 3,200 $ 15,900 May 3,700 $ 17,300 June 5,300 $ 25,500 July 5,600 $ 23,300 August 5,800 $ 24,900 September 4,800 $ 23,900 October 5,200 $ 24,400 November December 2,300 $ 11,800 3,200 $ 18,100 2. Using least-squares regression, estimate the variable cost per rental return and the monthly fixed cost incurred to wash cars. (Round Fixed cost to the nearest whole dollar amount and the Variable cost per unit to 2 decimal places.) Answer is complete but not entirely correct. Fixed cost per month $ 24X $ Variable cost per rental return 16,729.00

! Required information [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 Rental Returns Car Wash Costs January 2,500 $ 12,100 February 2,600 $ 13,700 March 2,800 $ 12,900 April 3,200 $ 15,900 May 3,700 $ 17,300 June 5,300 $ 25,500 July 5,600 $ 23,300 August 5,800 $ 24,900 September 4,800 $ 23,900 October 5,200 $ 24,400 November December 2,300 $ 11,800 3,200 $ 18,100 2. Using least-squares regression, estimate the variable cost per rental return and the monthly fixed cost incurred to wash cars. (Round Fixed cost to the nearest whole dollar amount and the Variable cost per unit to 2 decimal places.) Answer is complete but not entirely correct. Fixed cost per month $ 24X $ Variable cost per rental return 16,729.00

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter9: Responsibility Accounting And Decentralization

Section: Chapter Questions

Problem 5EB: Assume you are the warehouse manager for Vinnies Vinyls, a multi-location business specializing in...

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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 $ 11,600 February 2,500 $ 13,400 March 2,800 $ 12,400 April 3,100 $ 15,200 May 3,700 $ 16,800 June 5,200 $ 24,500 July 5,600 $ 22,800 August 5,600 $ 23,700 September 4,800 $ 23,400 October 4,200 $ 22,900 November 2,300 $ 11,300 December 3,000 $ 16,300 2. Using least-squares regression, estimate the variable cost…
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 $ 11,500 $ 13,400 $ 12,300 $ 15,000 $ 16,700 $ 24,300 $ 22,700 $ 23,400 $ 23,300 $ 22,600 $ 11,200 $ 16,000 January February 2,500 2,500 March April May June July August September October 2,800 3,100 3,700 5,100 5,600 5,600 4,800 4,100 2,200 3,000 November December 2. Using least-squares regression, estimate the variable cost per rental return and the monthly fixed cost incurred to wash cars. (Round Fixed cost to the…
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 5,200 5,600 5,700 4,800 4,900 Fixed cost per month Variable cost per rental return 2,300 3,100 Exercise 5A-2 Part 2 (Algo) Car Wash Costs $ 11,800 $ 13,500 $ 12,600 $ 15,500 $ 17,000 $ 24,900 $ 23,000 $ 24,200 $ 23,600 $ 23,500 $ 11,500 $ 17,000 2. Using least-squares regression; estimate the variable cost per rental return and the monthly fixed cost incurred to wash cars. Note: Round Fixed cost to the nearest whole dollar amount and the Variable cost per unit to 2 decimal…
Discuss how, as warehouse manager for Vinnies Vinyls, you view the different rate of allocated costs the warehouse is being charged compared to the West store. Describe the implications of this. What steps could you take to solve this discrepancy? What alternatives would you consider, assuming management is willing to consider making changes in the rate?
Solve the following: A company recently established a branch to sell its most popular fan. The company purchases these fans and stores them in a warehouse. The fans are then shipped from the warehouse to both the home office and the new branch, FOB destination. Home office management is responsible for setting the transfer price of the fans charged to the branch in a manner that will measure the long-run incremental cost of supplying the fans to the branch on a continuing basis. Per unit costs for the fans are P50.00 purchase price P2.50 shipping cost to warehouse P3.00 handling cost including P1.00 of allocated administrative overhead P3.50 shipping cost to branch paid by home office P1.25 shipping cost to home office The minimum transfer price that home office should charge the branch to meet its measurement objective is?
Assume you are the warehouse manager for Vinnies Vinyls, a multi-location business specializing in vinyl records. Vinniess operates under a cost-based transfer structure and the warehouse supplies all stores with the records. The stores can purchase records only from the warehouse, and the warehouse can only sell to Vinnies stores. The manager of the West store has some concerns relating to the stores financial performance and has asked for your help analyzing transfer costs. After calculating the operating income in dollars and the operating income percent, analyze the following financial information to determine costs that may need further investigation. (Hint: it may be helpful to perform a vertical analysis.)
Annie B's Homemade Ice Cream is an ice cream shop in Asheville, NC. Its owners would like your assistance in classifying some of its costs as direct or indirect depending on the specified cost object. Required: 1. Which of the following costs could be directly traced to specific flavors of ice cream? 2. Which of the following costs could be directly traced to specific mobile sales events, such as selling pre-packaged servings of ice cream at the Cold Mountain Music Festival? 3. Which of the following costs could be directly traced to "mobile sales" as opposed to "in-store sales? Complete this question by entering your answers in the tabs below. Requirement 1 Requirement 2 Requirement 3 Which of the following costs could be directly traced to specific flavors of ice cream? 1. Walk-in freezer depreciation 2 Wages paid to employees scooping ice cream in the store 3. Cost of ingredients used to make ice cream 4. Cost of electricity used to run the batch freezer that makes ice cream 5.…
Value chain and classification of costs, computer company. Dell Computer incurs the following costs:a. Utility costs for the plant assembling the Latitude computer line of productsb. Distribution costs for shipping the Latitude line of products to a retail chainc. Payment to David Newbury Designs for design of the XPS 2-in-1 laptopd. Salary of computer scientist working on the next generation of serverse. Cost of Dell employees’ visit to a major customer to demonstrate Dell’s ability to interconnect withother computersf. Purchase of competitors’ products for testing against potential Dell productsg. Payment to business magazine for running Dell advertisementsh. Cost of cartridges purchased from outside supplier to be used with Dell printers
Air Americo is about to introduce a daily round-trip flight from New York to Los Angeles and is determining how to price its round-trip tickets. The market research group at Air Americo segments the market into business and pleasure travelers. It provides the following information on the effects of two different prices on the number of seats expected to be sold and the variable cost per ticket, including the commission paid to travel agents: Price Charged Variable Costs per Ticket # of Seats Expected to be Sold Business Pleasure 800 2,100 75 300 150 185 285 30 Pleasure travelers start their travel during one week, spend at least I weekend at their destination, and return the following week or thereafter. Business travelers usually start and complete their travel within the same workweek. They do not stay over weekends. Assume that round-trip fuel costs are fixed costs of $24,500 and that fixed costs allocated to the round-trip flight for airplane-lease costs, ground services, and…
You are the warehouse manager for a multi-location business specializing in old style vinyl records. The company operates under a cost-based transfer structure and the warehouse supplies all stores with the records. The stores can purchase records only from the warehouse, and the warehouse can only sell to the stores. The manager of the West store has concerns relating to the store’s financial performance and has asked for help analyzing transfer costs. After calculating the operating income in dollars and the operating income percent, analyze the following financial information to determine costs that may need further investigation. It may be helpful to perform a vertical analysis (i.e., perform a vertical analysis). warehouse west store sales $18,920 $43,860 cost of goods sold 9,082 21,053 gross profit $9,838 $22,807 selling expenses 860 2,752 Wges expenses 4,730 15,351 costs allocated from corporate 2,838 4,386 total expenses $8,428 $22,489 operating…
An example of an uncontrollable cost would include all of the following except ________. A) hourly rate of pay for the company's purchasing manager B) federal income tax rate paid by the company C) real estate taxes charged by the county in which the business operates D) per-gallon cost of fuel for the company's delivery trucks
Which of the following is an opportunity cost of replacing the old computer terminals with new flat-panel displays? O Wages of the registration desk personnel O Cost of electricity to run the terminals O Benefits from a new freezer O Rent on the space occupied by the registration desk