Caiman the Brazilian company of a U.S. 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 460,000 cases of products in Brazil next month. The controller has classified operating costs (excluding costs of the distributed product as follows: Behavior Operating Cost All variable 340,000 Supplies 150,000 Fixed 210,000 Supervision 1165,000 190,000 Fixed Truck expense 845.000 540,000 Fixed Building leases 230,000 135,000 Fixed 870.000 145,000 Fixed 765,000 600,000 Fixed Equipment leases 1.010.000 Data processing equipment 830000 390.000 Fixed $6,265 000 Although overhead costs were related no 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