Reference no: EM131750012

aiman Distribution Partners is the Brazilian distribution company of a U.S. consumer products firm. Inflation in Brazil has made bidding and budgeting difficult for marketing managers trying to penetrate some of the country's rural regions. The company expects to distribute 440,000 cases of products in Brazil next month. The controller has classified operating costs (excluding costs of the distributed product) as follows:

Although overhead costs were related to revenues throughout the company, the experience in Brazil suggested to the managers that they should incorporate information from a published index of Brazilian prices in the distribution sector to forecast overhead in a manner more likely to capture the economics of the business.

Following instructions from the corporate offices, the controller's office in Brazil collected the following information for monthly operations from last year:

These data are considered representative for both past and future operations in Brazil.

(b) Use the high-low method to compute an estimate of operating costs assuming that 440,000 cases will be shipped next month. (Round variable costs to five decimal places. Round your other intermediate calculations and final answer to nearest whole dollar value.)