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 eight months were collected:

	Month	Labor Cost			Employee Hours
	January		$6,900			330
	February		8,040			520
	March		9,799			610
	April		9,687			580
	May		8,390			450
	June		7,350			320
	July		9,390			540
	August		7,431			280

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

Total Labor Cost = $5421 + ($7.18 X Employee Hours)

Required:

Assume that 3,900 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. $