5-8-4
IThe following information applies to the questions displayed below.] Caiman Distribution Partners is the Brazilian distribution company of a U.S. consumer products firm. Inflation in Brazil has made bidding and budgeting difficult for marketing managers trying to penetrate some of the country's rural regions. The company expects to distribute 450,000 cases of products in Brazil next month. The controller has classified operating costs (excluding costs of the distributed product) as follows Account Supplies Supervision Truck expense Building leases Utilities Warehouse labor Equipment leases Data processing equipment Other Total Operating Cost $1,008.000 Behavior All variable 207000 135,000 Fixed 140,000 181000 Fixed 870,000 555,000 Fixed 227000 124,000 Flxed 852,000 143,000 Fixed 748,000 604.000 Flxed 938,000 855,000 385,000 Fxed All fixed $6,845.000 Although overhead costs were related to revenues throughout the company, the experience in Brazil suggested to the managers that they should incorporate information from a published index of Brazilian prices in the distribution sector to forecast overhead in a manner more likely to capture the economics of the business. Following instructions from the corporate offices, the controller's office in Brazil collected the following information for monthly operations from last year: Cases 258,000 343,000 259,000 415,000 352.000 339,000 410,000 455,000 398,000 408,000 396,000 456,000 Price Index 108 109 115 118 131 112 135 135 135 136 132 146 Operating Costs $5,699,153 5,806,652 5,849.919 5,927631 5,939,149 6,043,378 5.918,509 6,133,882 6,126,144 6,186,639 6,208,813 6,362,269 Month 8 10 12 These data are considered representative for both past and future operations in Brazil. Required Information [The following information applies to the questions displayed below., Caiman Distribution Partners is the Brazilian distribution company of a U.S consumer products firm. Inflation in Brazil has made bidding and budgeting difficult for marketing managers trying to penetrate some of the country's rural regions. The company expects to distribute 450,000 cases of products in Brazil next month. The controller has classified operating costs (excluding costs of the distributed product) as follows: Account Supplies Supervision Truck expense Bullding leases Utilities Warehouse labor Equipment leases Data processing equipment Other Total Operating Cost Behavior $1,008,000 All varlable 207,000 135,000 Fixed 1140,000 181,000 Flxed 870,000 555,000 Fixed 227,000 124,000 FIxed 852,000 143,000 FIxed 748,000 604,000 Fixed 938,000 855,000 385,000 FIxed All fixed $6,845,000 Although overhead costs were related to revenues throughout the company, the experience in Brazil suggested to the managers that they should incorporate information from a published index of Brazilian prices in the distribution sector to forecast overhead in a manner more likely to capture the economics of the business Following instructions from the corporate offices, the controller's office in Brazil collected the following information for monthly operations from last year: Month Cases 258,000 343,000 259,000 415,000 352,000 339,000 410,000 455,000 398,000 408,000 396,000 456,000 Price Index 108 109 115 118 131 112 135 135 135 136 132 146 Operating Costs $5,699,153 5,806,652 5,849,919 5,927,631 5,939,149 6,043,378 5,918,509 6,133,882 6,126,144 6,186.639 6,208,813 6,362,269 2 3 4. 7 10 12 These data are considered representative for both past and future operations in Brazil d-1. Enter the regression coefficients. (Round "Cases" to 5 decimal places and "Price Index" to 5 decimal places.) Intercept Cases Price Index d-2. Compute the estimation of operating costs assuming that 450,000 cases will be shipped next month by using the results of a multiple regression of operating costs on cases shipped and the price level. Assume a price level of 152 for next month. (Round "Cases" and "Price Index" to 5 decimal places. Round the final answer to the nearest whole dollar amount.) Estimate of operating cost
