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Am I calculating these correctly? Using High-Low to Calculate Predicted Total Variable Cost and Total cost for a Time Period that differs from the Data
Am I calculating these correctly?
Using High-Low to Calculate Predicted Total Variable Cost and Total cost for a Time Period that differs from the Data Period Pizza Vesuvio makes specialty pizzas. Data for the past 8 months were collected: Month Labor Cost Employee Hours January $6,900 380 February 9,799 570 March 680 8,040 9,687 April 630 May 8,390 500 June 7,431 370 July 9,390 590 August 7,350 330 Assume that this information was used to construct the following formula for monthly labor cost. Total Labor Cost = $6,700 + ($1.97 X Employee Hours) Required: Assume that 4,100 employee hours are budgeted for the coming year. Use the total labor cost formula to make the following calculations: 1. Calculate total variable labor cost for the coming year. Round your answer to the nearest dollar. 8,077 2. Calculate total fixed labor cost for the coming year. Round your answer to the nearest dollar. 6,681 3. Calculate total labor cost for the coming year. Round your answer to the nearest dollar. 14,758Step by Step Solution
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