Problem 2-21

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:

MonthLabor HoursOverhead CostsJanuary3,500$74,000February2,80069,200March3,00071,000April4,20077,000May4,50081,000June5,50088,000July6,50092,000August7,50098,000September7,800101,700October4,50082,000November3,10073,000December6,50091,000Total59,400$997,900

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. 12.25 and all other answers to 0 decimal places, e.g. 5,275.)

Variable cost=$

per labor hourFixed cost=$

Angie has booked 3,200 labor hours for the coming month. How much overhead should she expect to incur?(Round variable cost to 2 decimal places, e.g. 52.75 and all other answers to 0 decimal places, e.g. 5,275.)

Total cost =$

If Angie books one more catering job for the month, requiring 200 labor hours, how much additional overhead should she expect to incur?(Round variable cost to 2 decimal places, e.g. 52.75 and all other answers to 0 decimal places, e.g. 5,275.)

Additional overhead =$