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 8 months were collected:

Month	Labor Cost			Employee Hours
January	$6,900			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

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

Intercept	4,452
X Variable	8.31

In your calculations, round the variable rate per employee hour to the nearest cent.

Required:

Use the results of regression to make the following calculations:

1. Calculate the fixed cost of labor. $fill in the blank 1

Calculate the variable rate per employee hour. $fill in the blank 2per employee hour

2. Construct the cost formula for total labor cost. Total labor cost = $fill in the blank 3 + ($fill in the blank 4 Employee hours)

3. Calculate the budgeted cost for next month, assuming that 700 employee hours are budgeted. Round answer to the nearest dollar.