An expert is analyzing the cost behavior patterns of the defendant in an antitrust dispute. The expert plans to use the information to prepare a damage estimate. The expert analyzed 30 months of cost and sale data for the Downtown Department Store. The results of regression-correlation analyses on the store's six cost categories regressed against sales dollars are as follows:

a. Use the cost behavior data presented above to make a point estimate of expected costs and net income for the month of July (assuming sales of \(\$ 980,000\) ).

b. How would you describe (categorize) each of the costs?

c. How strong do you feel about estimations you made in part a?

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Account a value b value r squared Cost of goods sold $45,000 46 .88 Store salaries $65,000 .055 .72 Store utilities $26,000 015 34 Store maintenance $14,000 08 035 Advertising $26,000 .01 .001 Corporate overhead $75,000 .025 045