Davis Stores sells clothing in 15 stores located around the southwestern United States. The managers at...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
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 101 $4,300 2,427 6,038 102 103 104 105 106 107 108 109 110 111 112 113 114 115 4,382 3,214 4,423 7,094 2,079 6,416 3,828 4,286 5,190 3,752 5,617 3,124 Costs $4,514 3,294 5,481 4,498 4,276 4,019 5,329 3,374 5,488 3,559 4,679 3,600 3,156 5,055 3,286 Required . Use the high-low method to estimate the fixed and variable portions of store costs based on revenues. . Managers estimate that one of the proposed stores will have revenues of $4.5 million. What are the estimated monthly overhead osts, assuming no inflation? Managers are also considering a "mega-store" with revenues of $30 million. What are the estimated monthly overhead costs, assuming no inflation? 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 101 $4,300 2,427 6,038 102 103 104 105 106 107 108 109 110 111 112 113 114 115 4,382 3,214 4,423 7,094 2,079 6,416 3,828 4,286 5,190 3,752 5,617 3,124 Costs $4,514 3,294 5,481 4,498 4,276 4,019 5,329 3,374 5,488 3,559 4,679 3,600 3,156 5,055 3,286 Required . Use the high-low method to estimate the fixed and variable portions of store costs based on revenues. . Managers estimate that one of the proposed stores will have revenues of $4.5 million. What are the estimated monthly overhead osts, assuming no inflation? Managers are also considering a "mega-store" with revenues of $30 million. What are the estimated monthly overhead costs, assuming no inflation?
Expert Answer:
Answer rating: 100% (QA)
ANSWERS The highlow method is a technique used to estimate the fixed and variable portions of costs based on the highest and lowest levels of activity In this case the activity level is revenue and we ... View the full answer
Related Book For
Fundamentals of Cost Accounting
ISBN: 978-1259565403
5th edition
Authors: William Lanen, Shannon Anderson, Michael Maher
Posted Date:
Students also viewed these accounting questions
-
Think of two possible measures for each concept listed below. (Ex: Nominal, Ordinal, Interval, Ratio) Discuss each measure in terms of its potential validity, reliability, comprehensibility, cost...
-
You have been hired by the Regional Real Estate Company to help them analyze real estate data. One of the companys Pacific region salespeople just returned to the office with a newly designed...
-
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...
-
After deducting capital allowances for the year to 31 December 2019, the tax written down values of a company's plant and machinery were as follows: Calculate the capital allowances available for the...
-
Two long wires lie in a xy plane, and each carries a current in the positive direction of the x axis. Wire 1 is at y = 10.0 cm and carries 6.00 A; wire 2 is at y = 5.00 cm and carries 10.0 A. (a) In...
-
Explain why the billing function should be segregated from credit granting, cash collection, and accounting.
-
In Exercises 9 and 10, use the given set of points to a. Compute b0 and b1. b. Compute the predicted value y for the given value of x. c. Compute the residual standard deviation se. d. Compute the...
-
Amy Torbert operates Hollins Riding Academy. The academy's primary sources of revenue are riding fees and lesson fees, which are paid on a cash basis. Amy also boards horses for owners, who are...
-
how this following article related to culture and glocalization: Decoding Western Festive Season Symbols and Rituals in Marketing Messages: A Bottom of the Pyramid Consumer Study in South Africa
-
You are Maria Herrera and have been recently promoted to the position of director of financial analysis for a medium-size consumer goods firm. During your first few weeks on the job, you took the...
-
Madison is holding a birthday party for her daughter on October 15. On Sept. 1 hires Elsa to be present at the bash. The party is set for October 15, with Elsa to be paid $250 at the party. On Sept....
-
With a group of classmates, identify the co- cultures to which each of you belongs. What in-groups do you belong to? You can best answer this question by thinking about whom you regard as belonging...
-
In a group, have each member choose one of the following situations, and describe how it could be perceived differently by each person. Be sure to include the steps of selection, organization, and...
-
Interview someone from a culture different from your own, and learn at least three ways in which nonverbal codes differ from the environment where you were raised. Together, develop a list of ways...
-
Demonstrate for yourself that it is impossible to avoid communicating nonverbally by trying not to communicate with a friend or family member. (You be the judge of whether to tell the other person...
-
Identify an important relational dimension (positive or troublesome) in a current or past close relationship. Describe to your classmates how you did express, or could have expressed, your thoughts...
-
Given only the following information for year 2 of capital expenditure budget, compute the total year 2 relevant after-tax cash flow for capital budgeting Net Present Value purposes. Enter whole...
-
Solve each equation or inequality. |6x8-4 = 0
-
Refer to the data in Exercise 14-28. Required Evaluate the performance of the two divisions assuming BMI uses economic value added. Data From Exercise 14-28: Back Mountain Industries (BMI) has two...
-
Big City Bank processes the checks its customers write at Riverdale Operations Center (ROC). ROC processed 2,800,000 checks in September. It takes only seconds to process a check, so none are left...
-
Recall the analysis for Davis Stores in Exercises 5-39, 5-40, and 5-41. During a discussion of those results, one of the managers suggests that number of employees might be better at explaining cost...
-
The parameters of the BiCMOS circuit in Figure P12.40 are \(V^{+}=5 \mathrm{~V}\), \(V_{G G}=2.5 \mathrm{~V}, R_{D 1}=5 \mathrm{k} \Omega, R_{E 2}=1.6 \mathrm{k} \Omega\), and \(R_{L}=1.2 \mathrm{k}...
-
Redesign the feedback circuit in Figure P12.36 using MOSFETs to provide a voltage gain of \(A_{v f}=8\) and such that \(v_{o}=0\) when \(v_{i}=0\). Assume circuit parameters of \(R_{S}=1 \mathrm{k}...
-
Design a discrete transistor feedback voltage amplifier to provide a voltage gain of 50. Assume the available transistors have parameters: \(h_{F E}=120\) and \(V_{A}=\infty\). The signal voltage...
Study smarter with the SolutionInn App