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Required information [The following information applies to the questions displayed below.] Davis Stores sells clothing in 15 stores located around the southwestern United States.
Required information [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): Store Costs Employees Revenues 101$ 4,214 39$ 4,100 102 2,894 29 2,227 103 5,181 47 5,738 104 3,998 38 3,982 105 3,676 33 2,914 106 3,319 38 4,023 107 5,029 54 6,894 108 2,374 26 1,779 109 4,688 44 5,416 110 2,959 35 3,228 111 4,179 37 3,886 112 3,200 41 4,690 113 2,556 35 3,552 114 4,655 42 4,817 115 2,986 28 2,124 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 calculation. Negative amounts should be indicated by a minus sign. Round your answer to the nearest whole number (in thousands of dollars).) Variable cost (per employee) Fixed cost
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