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 Operating Cost Behavior Supplies $ 350,000 All variable Supervision 230,000 $ 160,000 Fixed Truck expense 1,205,000 $ 190,000 Fixed Building leases 850,000 $ 550,000 Fixed Utilities 220,000 $ 130,000 Fixed Warehouse labor 870,000 $ 140,000 Fixed Equipment leases 745,000 $ 590,000 Fixed Data processing equipment 1,010,000 All fixed Other 830,000 $ 390,000 Fixed Total $ 6,310,000

1.Compute an estimate of operating costs assuming that 450,000 cases will be shipped next month by using the results of a simple regression of operating costs on cases shipped.

2.Compute an estimate 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 143 for next month.