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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	$4,110	$4,229
102	2,237	2,914
103	5,753	5,196
104	4,002	4,023
105	2,929	3,706
106	4,043	3,354
107	6,904	5,044
108	1,794	2,424
109	5,466	4,728
110	3,258	2,989
111	3,906	4,204
112	4,715	3,220
113	3,562	2,586
114	4,857	4,675
115	2,174	3,001

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

Equation:
Store costs = $1,626.0 + (Revenue 53.4%)
Statistical data
Correlation coefficient	0.836
R2	0.699

• Required A

Estimate store costs for a store with revenue of $2.6 million. (Enter the answer in thousands of dollars. Round your answer to 2 decimal places.)

	Store cost

• Required B

What percentage of the variation in store costs is explained by the independent variable? (Enter answer as a percentage rounded to 1 decimal place.)

Percentage of variation in store cost

%