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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	$4,140	$4,274
102	2,267	2,974
103	5,798	5,241
104	4,062	4,098
105	2,974	3,796
106	4,103	3,459
107	6,934	5,089
108	1,839	2,574
109	5,616	4,848
110	3,348	3,079
111	3,966	4,279
112	4,790	3,280
113	3,592	2,676
114	4,977	4,735
115	2,324	3,046

Required

a. Use the high-low method to estimate the fixed and variable portions of store costs based on revenues.

b. Managers estimate that one of the proposed stores will have revenues of $2.9 million. What are the estimated monthly overhead costs, assuming no inflation?

c. Managers are also considering a mega-store with revenues of $14 million. What are the estimated monthly overhead costs, assuming no inflation?