Required information Skip to question [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.
Required information Skip to question [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.
Chapter9: Responsibility Accounting And Decentralization
Section: Chapter Questions
Problem 4EA: The following information is from Daves Sporting Goods. Daves is a Midwest sporting goods store with...
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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 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.
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