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 440,000 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	220,000	$	150,000	Fixed
Truck expense	1,130,000	$	190,000	Fixed
Building leases	865,000	$	560,000	Fixed
Utilities	210,000	$	125,000	Fixed
Warehouse labor	865,000	$	135,000	Fixed
Equipment leases	750,000	$	590,000	Fixed
Data processing equipment	990,000	All fixed
Other	850,000	$	410,000	Fixed
Total	$	6,230,000

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	Price Index	Operating Costs
1	350,000	116	$	5,739,139
2	367,000	118	5,846,638
3	363,000	119	5,889,905
4	385,000	123	5,967,617
5	379,000	125	5,979,135
6	400,000	126	6,083,364
7	372,000	129	5,958,495
8	417,000	134	6,173,868
9	403,000	134	6,166,130
10	426,000	133	6,226,625
11	422,000	137	6,248,799
12	437,000	140	6,402,255

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 440,000 cases will be shipped next month. (Round variable costs to five decimal places. Round your other intermediate calculations and final answer to nearest whole dollar value.)