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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	$4,210	$4,379
102	2,337	3,114
103	5,903	5,346
104	4,202	4,273
105	3,079	4,006
106	4,243	3,704
107	7,004	5,194
108	1,944	2,924
109	5,966	5,128
110	3,558	3,289
111	4,106	4,454
112	4,965	3,420
113	3,662	2,886
114	5,257	4,875
115	2,674	3,151

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 $3.6 million. What are the estimated monthly overhead costs, assuming no inflation?

c. Managers are also considering a mega-store with revenues of $21 million. What are the estimated monthly overhead costs, assuming no inflation?