High and Low Method

Jim, the owner of Jims Bistro, wants to analyze labor costs in his restaurant operations and has asked your assistance. Using the H-L method answer the following questions.

Month	Number of Customers	Labor Costs
Jan	4,000	$15,500
Feb	2,400	10,450
March	3,700	18,500
April	4,450	19,000
May	4,400	19,000
June	4,800	20,250
July	5,000	20,500
Aug	3,900	18,500
Sept	3,800	18,000
Oct	3,100	15,500
Nov	2,900	15,250
Dec	3,000	16,650
Total

Using the high/low two-point method, determine the variable labor cost per customer.

What is the monthly fixed labor cost at Jims Place?

What is your estimate of total labor costs if 3,900 customers are served during the month? (Base this on your analysis in parts 1 and 2 above)