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 $1,415,000 204,000 1,340,000 844,000 213,000 847,000 761,000 958,000 849,000 $7,431,000 Behavior All variable $160,000 Fixed $196,000 Fixed $556,000 Fixed $143,000 Fixed $144,000 Fixed $581,000 Fixed All fixed $373,000 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 B 9 10 11 12 Cases 249,000 346,000 250,000 406,000 335,000 362,000 395,000 456,000 385,000 432,000 398,000 457,000 Price Index 115 115 122 128 117 124 129 127 136 135 130 143 Operating costs $5,699,165 5,806,664 5,849,931 5,927,643 5,939,161 6,043,390 5,918,521 6,133,894 6,126, 156 6,186,651 6,208,825 6,362,281 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. a-1. Variable cost per case a-2. Estimate of operating cost 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 c-1. Using Excel, calculate the simple regression of operating costs on cases shipped and enter the regression coefficients. c-2. Compute the estimation 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. Complete this question by entering your answers in the tabs below. Reg C1 Reg C2 Using Excel, calculate the simple regression of operating costs on cases shipped and enter the regression coefficients. (Round "Intercept" to nearest whole dollar amount. Round the case coefficient to 5 decimal places.) Intercept Cases c-1. Using Excel, calculate the simple regression of operating costs on cases shipped and enter the regression coefficients. c-2. Compute the estimation 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. Complete this question by entering your answers in the tabs below. Red C1 Reg C2 Compute the estimation 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. (Round variable costs per unit to 5 decimal places. Round the intercept and final answer to the nearest whole dollar amount.) Estimate of operating cost d-1. Enter the regression coefficients. 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 149 for next month. Complete this question by entering your answers in the tabs below. Req D1 Req D2 Enter the regression coefficients. Run a multiple regression analysis based on operating costs on cases shipped and the price level. (Round "Cases" to 5 decimal places and "Price Index" to 5 decimal places.) Intercept Cases Price Index Reg D1 Req D2 > d-1. Enter the regression coefficients. 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 149 for next month. Complete this question by entering your answers in the tabs below. Reg D1 Reg D2 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 149 for next month. (Round the case coefficient to 5 decimal places and the price index coefficient to 2 decimal places. Round the final answer to the nearest whole dollar amount.) Show less Estimate of operating cost
