Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

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 Revenues Costs Employees
101 $4,539 $2,388 31
102 6,449 4,781 47
103 5,163 2,719 38
104 4,149 2,602 30
105 4,795 3,440 35
106 3,899 2,474 44
107 6,824 2,802 28
108 3,570 3,951 40
109 2,500 1,955 26
110 6,250 3,917 34
111 6,206 4,181 35
112 2,750 5,939 55
113 4,843 3,257 44
114 3,850 4,752 54
115 2,790 2,334 34

b. Use the results of your high-low analysis to estimate the cost for a store with 49 employees. (Round your intermediate calculations to 2 decimal places. Enter your answer in thousands of dollars.)

Store cost=

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

An Audit Is An Audit Is An Audit

Authors: Marina Peters

1st Edition

B08B37VNZ6, 979-8652328412

More Books

Students also viewed these Accounting questions

Question

friendliness and sincerity;

Answered: 1 week ago