Question
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
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 | $7,000 | 360 | |||
February | 8,140 | 550 | |||
March | 9,899 | 630 | |||
April | 9,787 | 610 | |||
May | 8,490 | 480 | |||
June | 7,450 | 350 | |||
July | 9,490 | 570 | |||
August | 7,531 | 310 |
Assume that this information was used to construct the following formula for monthly labor cost.
Total Labor Cost = $5,237 + ($7.40 x Employee Hours) |
Required:
Assume that 4,000 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. $
2. Calculate total fixed labor cost for the coming year. $
3. Calculate total labor cost for the coming year. $
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started