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181 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. The following data were collected from last year's operations (revenues and costs in thousands of dollars), Store Revenues Costs $4,110 54,229 102 2,237 2,914 103 5,753 5,196 104 4,092 4,023 105 2,929 3,706 4,043 3,354 107 6,904 5,044 1.794 2,424 109 5,466 4,728 110 3,258 2,989 111 3,906 4,204 112 4,715 3,220 113 3,562 2,586 114 4,857 4,675 115 2,174 3,001 106 108 Exercise 5-42 (Algo) Methods of Estimating Costs: High-Low (LO 5.4) Required Use the high-low method to estimate the fixed and variable portions of store costs based on revenues b. Managers estimate that one of the proposed stores will have revenues of $2.6 million What are the estimated monthly overhead costs, assuming no inflation? c. Managers are also considering a "mega-store with revenues of $11 millon. What are the estimated monthly overhead costs ossuming no Inflation? Required A Required B Required Use the high-low method to estimate the fixed and variable portions of store costs based on reve percentage answer to 1 decimal place. Enter fixed cost answer in thousands of dollars.) % Variable cost Fixed cost R Required B > Required A Required B Required c Managers estimate that one of the proposed stores will have revenues of $2.6 million. We overhead costs, assuming no inflation? (Do not round variable cost percentage for your c calculations to the nearest whole dollar. Enter your answer in thousands of dollars.) Store costs Required A Required B Required c Managers are also considering a "mega-store" with revenues of $11 million. What are the estimate assuming no inflation? (Do not round variable cost percentage for your calculations. Round your in the nearest whole dollar. Enter your answer in thousands of dollars.) Store costs 0.035 R2 0.699 Required: a. Estimate store costs for a store with revenue of $2.6 million. b. What percentage of the variation in store costs is explained by the independ Complete this question by entering your answers in the tabs below. Required A Required B What percentage of the variation in store costs is explained by the independent va rounded to 1 decimal place.) Percentage of variation in store cost %

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