Problem 5-68 (Static) Part a 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
Problem 5-68 (Static) Part a 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
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
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Transcribed Image Text:Problem 5-68 (Static) Part a
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
![Required information
Problem 5-68 (Static) Cost Estimation: Simple and Multiple Regression Using a Spreadsheet (Appendix
A) (LO 5-4, 5, 6, 9)
[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):
Costs Employees
101$ 4,214
102
2,894
103
5, 181
104
3,998
105
3,676
106
107
108
109
110 2,959
111
4,179
112
113
Store
114
115
3, 319
5, 029
2,374
4, 688
3, 200
2,556
4, 655
2,986
39$
29
47
38
33
38
54
26
44
35
37
41
35
42
28
Revenues
4, 100
2,227
5,738
3,982
2,914
4,023
6,894
1,779
5,416
3,228
3,886
4, 690
3,552
4,817
2,124](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F4fcd0d27-b7d3-473e-9005-6977db3b469b%2Fe65e5a36-9cb7-4f23-b06c-26b9398c879b%2Ffzltjv9_processed.png&w=3840&q=75)
Transcribed Image Text:Required information
Problem 5-68 (Static) Cost Estimation: Simple and Multiple Regression Using a Spreadsheet (Appendix
A) (LO 5-4, 5, 6, 9)
[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):
Costs Employees
101$ 4,214
102
2,894
103
5, 181
104
3,998
105
3,676
106
107
108
109
110 2,959
111
4,179
112
113
Store
114
115
3, 319
5, 029
2,374
4, 688
3, 200
2,556
4, 655
2,986
39$
29
47
38
33
38
54
26
44
35
37
41
35
42
28
Revenues
4, 100
2,227
5,738
3,982
2,914
4,023
6,894
1,779
5,416
3,228
3,886
4, 690
3,552
4,817
2,124
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