Use the high low method to estimate the fixes and variable portions of store costs based on revenues.

Managers est. one store will have revenue of 4.0 million. What are the overhead costs, assuming no inflation?

Also consider megastore with revenue of 25 million.

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. The believe that costs are driven in large part by store volume measured by revenue. The following data were collected last year's operations (revenues and costs in thousands of dollars). Store lei 102 103 104 105 106 107 108 109 110 111 112 113 114 115 Revenues $4,250 2,377 5,963 4,282 3,139 4,323 7,044 2.004 6,166 3,678 4,186 5,065 3,702 5,417 2,874 Costs $4,439 3,194 5,406 4,373 4,126 3,844 5,254 3,124 5,288 3,409 4,554 3,500 3,006 4,955 3,211