Using Regression to Calculate Fixed Cost, Calculate the Variable Rate, Construct a Cost Formula, and Determine Budgeted Cost

Pizza Vesuvio makes specialty pizzas. Data for the past eight months were collected:

Month	Labor Cost	Employee Hours
January	$7,000			360
February	8,140			550
March	9,899			630
April	9,787			590
May	8,490			480
June	7,450			350
July	9,490			570
August	7,531			310

Coefficients shown by a regression program for Pizza Vesuvio's data are:

Intercept	4,481
X Variable	8.32

Required:

Use the results of regression to make the following calculations:

1. Calculate the fixed cost of labor. $

Calculate the variable rate per employee hour. $per employee hour

2. Construct the cost formula for total labor cost. Total labor cost = $+ ($ Employee hours)

3. Calculate the budgeted cost for next month, assuming that 670 employee hours are budgeted. Round answer to the nearest dollar. $