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eBook Show Me How Print Item Question Content Area Using High-Low to Calculate Predicted Total Variable Cost and Total Cost for Budgeted Output Pizza Vesuvio
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Using High-Low to Calculate Predicted Total Variable Cost and Total Cost for Budgeted Output
Pizza Vesuvio makes specialty pizzas. Data for the past 8 months were collected:
Month | Labor Cost | Employee Hours | |||
January | $6,800 | 400 | |||
February | $9,699 | 590 | |||
March | $7,940 | 670 | |||
April | $9,587 | 650 | |||
May | $8,290 | 520 | |||
June | $7,331 | 390 | |||
July | $9,290 | 610 | |||
August | $7,250 | 350 |
Assume that this information was used to construct the following formula for monthly labor cost.
Total Labor Cost = $6494 + ($2.16 x Employee Hours) |
Required:
Assume that 635 employee hours are budgeted for the month of September. Use the total labor cost formula for the following calculations:
1. Calculate total variable labor cost for September. Round your answer to nearest whole number. $fill in the blank 1
2. Calculate total labor cost for September. Round your answer to nearest whole number. $fill in the blank 2
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