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		$7,300			390
	February		10,199			580
	March		8,440			690
	April		10,087			640
	May		8,790			510
	June		7,831			380
	July		9,790			600
	August		7,750			340

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

Total Labor Cost = $7,080 + ($1.97 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. $