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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. The

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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. 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 year's operations (revenues and costs in thousands of dollars). Store Revenues Costs 101 $4,100 $4,214 102 2,227 2,894 103 5,738 5,181 104 3,982 3,998 105 2,914 3,676 106 4,023 3,319 107 6,894 5,029 108 1,779 2,374 109 5,416 4,688 110 3,228 2,959 111 3,886 4,179 112 4,690 3,200 113 3,552 2,556 114 4,817 4,655 115 2,124 2,986 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 $2.5 million. What are the estimated monthly overhead costs, assuming no inflation? c. Managers are also considering a "mega-store with revenues of $10 million. What are the estimated monthly overhead costs, assuming no inflation? Use the high-low method to estimate the fixed and variable portions of store costs based on revenues. (Round variable cost percentage answer to 1 decimal place. Enter Fixed cost answer in thousands of dollars.) % Variable cost Fixed cost 51.9 $ 1,451,014 Managers estimate that one of the proposed stores will have revenues of $2.5 million. What are the estimated monthly overhead costs, assuming no inflation? (Round your final answer to 1 decimal place. Round your intermediate calculations to the nearest whole dollar. Enter your answer in thousands of dollars.) Store costs $ 2,748,514.0 Managers are also considering a "mega-store with revenues of $10 million. What are the estimated monthly overhead costs, assuming no inflation? (Round your final answer to 1 decimal place. Round your intermediate calculations to the nearest whole dollar. Enter your answer in thousands of dollars.) Store costs $6,641,014.0 %

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