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Angie March owns a catering company that stages banquets and parties for both individuals and companies. The business is seasonal, with heavy demand during the

Angie March owns a catering company that stages banquets and parties for both individuals and companies. The business is seasonal, with heavy demand during the summer months and year-end holidays and light demand at other times. Angie has gathered the following cost information from the past year:

Month Labor Hours. Overhead Costs

January 3,300. $51,750

February 2,600 49,240

March 2,700 50,240

April 3,800. 53,400

May 4,100. 56,190

June 5,300. 59,350

July 7,600 66,740

August 7,300 63,950

September. 6,200 59,720

October 4,300 57,050

November 2,900 52,030

December 6,300 60,650

Total 56,400 $680,310

(a) Identify the high and low points.

Activity Level $

High point ____________ $____________________

Low point ____________ $ ____________________

Using the high-low method, compute the overhead cost per labor hour and the fixed overhead cost per month. (Round variable cost to 2 decimal places, e.g. 15.25 and fixed cost to 0 decimal places, e.g. 5,275.)

Variable cost = ____________ per labor hour

Fixed cost =_____________________

(b) Angie has booked 4,200 labor hours for the coming month. How much overhead should she expect to incur?

Total cost = $_____________

(c) If Angie books one more catering job for the month, requiring 350 labor hours, how much additional overhead should she expect to incur?

Additional overhead = $__________

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