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	$4,190	$4,349
102	2,317	3,074
103	5,873	5,316
104	4,162	4,223
105	3,049	3,946
106	4,203	3,634
107	6,984	5,164
108	1,914	2,824
109	5,866	5,048
110	3,498	3,229
111	4,066	4,404
112	4,915	3,380
113	3,642	2,826
114	5,177	4,835
115	2,574	3,121

Simple regression results from the data of Davis Stores are as follows.

Equation:
Store costs = $1,815.1 + (Revenue 51.5%)
Statistical data
Correlation coefficient	0.838
R2	0.702

Required:

a. Estimate store costs for a store with revenue of $3.4 million.

b. What percentage of the variation in store costs is explained by the independent variable?

Requirement A: Store Cost

Requirement B: Percentage of variation in store cost %