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Davis Stores sells clothing in 15 stores located around the southwestern United States. The managers...

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Accounting

Davis Stores sells clothing in 15 stores located around the southwestern United States. The managers at Davis are considering expanding by opening new stores and are interested in estimating costs in potential new locations. They believe that costs are driven in large part by store volume measured by revenue. During a discussion, one of the managers suggests that number of employees might be better at explaining cost than store revenues. As a result of that suggestion, managers collected the following information from last years operations (revenues and costs in thousands of dollars):

Store Costs Employees Revenues
101 $1,700 24 $5,393
102 3,709 41 4,689
103 3,219 26 2,793
104 5,089 54 6,192
105 4,393 44 5,649
106 2,782 26 5,147
107 1,825 34 5,923
108 4,760 45 4,025
109 6,075 47 2,639
110 4,364 29 4,599
111 3,869 42 4,897
112 6,318 58 2,412
113 2,380 28 3,820
114 4,583 36 2,317
115 2,754 26 2,926

d-1. Enter the regression coefficients.

d-2. Estimate the cost of a store with 42 employees using the results from a simple regression of store cost on employees.

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