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. During a discussion, one of the managers suggests that number of employees might be better at explaining cost than store revenues. As a result of that suggestion, managers collected the following information from last years operations (revenues and costs in thousands of dollars):

Store	Costs	Employees	Revenues
101	$1,938	27	$2,315
102	2,280	36	3,487
103	2,732	37	4,245
104	3,257	40	6,059
105	4,348	33	5,552
106	5,536	46	3,842
107	5,436	52	3,592
108	3,080	40	2,989
109	3,914	54	3,670
110	2,487	30	5,828
111	2,685	37	3,203
112	5,174	35	4,009
113	5,717	45	6,332
114	2,383	29	6,619
115	2,978	35	4,461

Required

a. Use the high-low method to estimate the fixed and variable portions of store costs based on employees. (Do not round your intermediate calculations. Negative amounts should be indicated by a minus sign. Round your answers to 2 decimal places. Enter your answers in thousands of dollars.)

b. Use the results of your high-low analysis to estimate the cost for a store with 55 employees. (Do not round your intermediate calculations. Negative amounts should be indicated by a minus sign. Round your answer to the nearest whole number (in thousands of dollars).)

c. Prepare a scattergraph between store cost and employees.

d-1. Enter the regression coefficients. (Round your answers to 2 decimal places. Negative amounts should be indicated by a minus sign.)

d-2. Estimate the cost of a store with 55 employees using the results from a simple regression of store cost on employees. (Round your intermediate calculations and final answer to 2 decimal places.)

e-1. Enter the regression coefficients. (Round "Intercept", "Employees" and "Revenues" to 2 decimal places. Negative amounts should be indicated by a minus sign.)

e-2. Estimate the cost of a store with revenues of $3.50 million and 55 employees using the results of a multiple regression of store costs on store revenues and employees. (Round "Intercept", "Employees" and "Revenues" to 2 decimal places in the intermediate calculations. Round your final answers to 2 decimal places.)

Variable cost (per employee) Fixed cost Store cost Store cost Methods of Estimating Costs: Davis Stores $7,000 $6,000 - $5,000 000 Costs ($000) $2,000 $1,000 - 0 10 20 30 40 50 60 Employees Intercept Employees Store cost Intercept Revenues Employees Store cost