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	$	1,596,000		All variable
Supervision		235,000		$	145,000	Fixed
Truck expense		1,310,000		$	172,000	Fixed
Building leases		866,000		$	552,000	Fixed
Utilities		234,000		$	112,000	Fixed
Warehouse labor		855,000		$	121,000	Fixed
Equipment leases		770,000		$	589,000	Fixed
Data processing equipment		956,000		All fixed
Other		861,000		$	356,000	Fixed
Total	$	7,683,000

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	255,000	116	$5,699,173
2	339,000	112	5,806,672
3	256,000	109	5,849,939
4	435,000	129	5,927,651
5	343,000	113	5,939,169
6	380,000	124	6,043,398
7	460,000	124	5,918,529
8	483,000	123	6,133,902
9	341,000	143	6,126,164
10	418,000	134	6,186,659
11	408,000	133	6,208,833
12	484,000	143	6,362,289

These data are considered representative for both past and future operations in Brazil.

Required:

a-1. Determine the variable cost per case assuming that 450,000 cases will be shipped next month based on the controller's analysis of accounts. (Round your answer to 2 decimal places.)

a-2. Prepare an estimate of operating costs.

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.)