Required information Problem 5-68 (Algo) Cost Estimation: Simple and Multiple Regression Using a Spreadsheet (Appendix A) (LO 5-4,5,6,9) The following information applies to the questions displayed below) 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 year's operations (revenues and costs in thousands of dollars) Employees Revenues $2,463 Costs 29 49 Store 101 102 103 104 105 106 TA 4,955 5,197 5,911 2.256 $6,479 5,309 2,609 2,634 2.799 5,951 54 59 43 55 unat suggestion managers collected the tonowing mormation trom last year s operations (revenues and costs in thousands of dollars) Employees $2,463 $6,479 5,309 Costs Revenues Store 101 102 103 104 105 106 107 108 109 110 111 112 113 114 115 4,743 4,955 5,197 5,911 2,256 5,345 5,138 3,090 3,955 4,656 1,937 3,181 3,467 4.988 29 49 43 54 58 43 55 57 33 40 42 28 52 44 52 2,609 2,634 2,793 5,951 4,349 5,788 2,226 4,891 4,313 5,198 3,415 5,541 2,878 in tots . Problem 5-68 (Algo) Parta 66 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.) Variable cont per employee Fored.com $ $ 85.94 983 50 Problem 5-68 (Algo) Part b b. Use the results of your high-low analysis to estimate the cost for a store with 36 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) Store.com $ 4,077 Reg D: Reg 02 Enter the regression coefficierits. (Round your answers to 2 decimal places. Negative amounts should be akicated by a mis sign) Intercept Employees Reg D2 > Complete this question by entering your answers in the tabs below. Req: ReqD2 Estimate the cost of a store with 36 employees using the results from a simple regression of store cost on employees. (Round your intermediate calculations and final answer to 2 decimal places) Complete this question by entering your answers in the tabs below. Reges Reg E2 Estimate the cost of a store with revenues of $2.90 million and 36 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.) Store.com
