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 Hour

January $6,900 340

February 9,799 530

March 8,040 620

April 9,687 590

May 8,390 460

June 7,431 330

July 9,390 550

August 7,350 290

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

Total Labor Cost = $6,744 + ($2.09 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.

$