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		$7,100		430
	February		$9,999		620
	March		$8,240		730
	April		$9,887		680
	May		$8,590		550
	June		$7,631		420
	July		$9,590		640
	August		$7,550		380

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

Total Labor Cost = $6801 + ($1.97 x Employee Hours)

Required:

Assume that 655 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.

2. Calculate total labor cost for September. Round your answer to nearest whole number.