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:

MonthLabor CostEmployee HoursJanuary$6,900410February$9,799600March$8,040720April$9,687660May$8,390530June$7,431400July$9,390620August$7,350360

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

Total Labor Cost = $6659 + ($1.92 x Employee Hours)

Required:

Assume that 695 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.

$