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 $1,048,000 220,000 1,210,000 836,000 217,000 849,000 761,000 949,000 869,000 $6,959,000 Behavior All variable $ 166,000 Fixed $ 194,000 Fixed $ 538,000 Fixed $ 113,000 Fixed $ 123,000 Fixed $ 611,000 Fixed All fixed $ 395,000 Fixed 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 1 2 3 4 5 6 7 8 9 10 11 12 Cases 267,000 354,000 268,000 420,000 332,000 349,000 391,000 454,000 380,000 405,000 402,000 455,000 Price Index 105 108 118 123 127 119 130 136 133 132 131 143 Operating costs $5,699, 155 5,806,654 5,849,921 5,927,633 5,939, 151 6,043,380 5,918,511 6,133,884 6,126, 146 6,186,641 6,208,815 6,362,271 These data are considered representative for both past and future operations in Brazil. b. Use the high-low method to compute an estimate of operating costs assuming that 450,000 cases will be shipped next month. (Round variable cost to 3 decimal places. Round final answer to nearest whole dollar amount.) Estimate of operating cost