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Davis Stores sells clothing in 15 stores located around the southwestern United States. The managers at Davis are considering expanding by opening new stores
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 year's operations (revenues and costs in thousands of dollars) Store Revenues Costs 101 $4,150 $4,289 102 2,277 2,994 103 5,813 5,256 104 4,082 4,123 105 2,989 3,826 106 4,123 3,494 107 6,944 5,104 108 1,854 2,624 109 5,666 4,888 110 3,378 3,109 111 EEEEE 3,986 4,304 112 4,815 3,300 113 3,602 2,706 114 5,017 4,755 115 2,374 3,061 Exercise 5-42 (Algo) Methods of Estimating Costs: High-Low (LO 5-4) Required 6. 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 $3.0 million. What are the estimated monthly overheac
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