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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

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 8,040 650
April 9,687 630
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 = $6,637 + ($2.16 X Employee Hours)

Required:

Assume that 4,200 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. $

2. Calculate total fixed labor cost for the coming year. Round your answer to the nearest dollar. $

3. Calculate total labor cost for the coming year. Round your answer to the nearest dollar. $

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