Davis Stores sells clothing in 15 stores located around the southwestern United States. The managers at Davis are considering expanding by opening new stores and are interested in estimating costs in potential new locations. They believe that costs are driven in large part by store volume measured by revenue. The following data were collected from last years operations (revenues and costs in thousands of dollars).

Store	Revenues	Costs
101	$4,130	$4,259
102	2,257	2,954
103	5,783	5,226
104	4,042	4,073
105	2,959	3,766
106	4,083	3,424
107	6,924	5,074
108	1,824	2,524
109	5,566	4,808
110	3,318	3,049
111	3,946	4,254
112	4,765	3,260
113	3,582	2,646
114	4,937	4,715
115	2,274	3,031

Required a. Use the high-low method to estimate the fixed and variable portions of store costs based on revenues.

b. Managers estimate that one of the proposed stores will have revenues of $2.8 million. What are the estimated monthly overhead costs, assuming no inflation?

c. Managers are also considering a mega-store with revenues of $13 million. What are the estimated monthly overhead costs, assuming no inflation?