MILLE MIEURE IME made bidding and budgeting difficult for marketing managers trying to penetrate some of the country's rural regions. The company expects to distribute 450,000 cases of products in Brazil next month. The controller has classified operating costs (excluding costs of the distributed product) as follows. Account Supplies Supervision Truck expense Building leases Utilities Warehouse labor Equipment leases Data processing equipment Other Total Operating Cost $ 350,000 215,000 1,200,000 855,600 215,000 860,000 760,000 945,000 850,000 $6,250,000 Behavior All variable $ 150,00 Fixed $ 190,000 Fixed $ 550,00 Fixed $ 125,600 Fixed $ 140,00 Fixed $ 600, eee Fixed All fixed $ 400,000 Fixed Although overhead costs were related to revenues throughout the company, the experience in Brazil suggested to the managers that they should incorporate Information from a published index of Brazilian prices in the distribution sector to forecast overhead in a manner more likely to capture the economics of the business. Following Instructions from the corporate offices, the controller's office in Brazil collected the following Information for monthly operations from last year. Month 1 2 3 4 5 6 7 8 9 12 11 12 Cases 345,800 362,000 358,880 389, ese 374,080 395,000 367,000 412,600 398,888 421,080 417.000 432,000 Price Index 115 117 118 122 124 125 128 133 133 132 136 139 Operating costs 5,699, 139 5,886,638 5,849,905 5,927,617 5,939,135 6,643,364 5,918,495 6,133,868 6,126,138 6,186,625 6,208,799 6,362,255 These data are considered representative for both past and future operations in Brazil. d-1. Enter the regression coefficients d-2 Compute the estimation of operating costs assuming that 450,000 cases will be shipped next month by using the results of a multiple regression of operating costs on cases shipped and the price level. Assume a price level of 145 for next month. made Didging and Duageting amicuit for markeung managers trying to penetrate some of the countrys rurai regions, ine company expects to distribute 450.000 cases of products in Brazil next month. The controller has classified operating costs (excluding costs of the distributed product) as follows. Account Supplies Supervision Truck expense Building leases Utilities Warehouse labor Equipment leases Data processing equipment other Total Operating Cost $ 350,000 215,000 1,200,000 855,000 215,000 860,000 760, 880 945,000 850,000 $6,250,000 Behavior All variable $ 150,000 Fixed $ 199,90 Fixed $ 550,000 Fixed $ 125,00 Fixed $ 140,00 Fixed $ 600,000 Fixed All fixed $ 400.00 Fixed Although overhead costs were related to revenues throughout the company, the experience in Brazil suggested to the managers that they should incorporate Information from a published Index of Brazilian prices in the distribution sector to forecast overhead in a manner more likely to capture the economics of the business. Following Instructions from the corporate offices, the controller's office in Brazil collected the following information for monthly operations from last year. $ Month 1 2 3 4 5 6 7 8 9 10 12 12 Cases 345,000 362,800 358,000 380,000 374,800 395,000 367,000 412,000 398,000 421,600 417, ese 432,000 Price Index 115 117 11B 122 124 125 128 133 132 132 136 139 Operating costs 5,699,139 5,806,638 5,849,9es 5,927,617 5,939,135 6,643,364 5,918,495 6,133,868 6,126,130 6,186,625 6,208,799 6,362,255 These data are considered representative for both past and future operations in Brazil 1. Using Excel. calculate the simple regression of operating costs on cases shipped and enter the regression coefficients, 2. Compute the estimation of operating costs assuming that 450,000 cases will be shipped next month by using the results of a mple regression of operating costs on cases shipped
