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		$7,100			390
	February		9,999			580
	March		8,240			680
	April		9,887			640
	May		8,590			510
	June		7,631			380
	July		9,590			600
	August		7,550			340

Assume that this information was used to construct the following formula for monthly labor cost.

Total Labor Cost = $6,860 + ($2.03 X Employee Hours)

Required:

Assume that 3,800 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.