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eBook Show Me How Print Item Question Content Area Using High-Low to Calculate...

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Accounting

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Using High-Low to Calculate Predicted Total Variable Cost and Total Cost for Budgeted Output

Pizza Vesuvio makes specialty pizzas. Data for the past 8 months were collected:

Month Labor Cost Employee Hours
January $6,800 400
February $9,699 590
March $7,940 670
April $9,587 650
May $8,290 520
June $7,331 390
July $9,290 610
August $7,250 350

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

Total Labor Cost = $6494 + ($2.16 x Employee Hours)

Required:

Assume that 635 employee hours are budgeted for the month of September. Use the total labor cost formula for the following calculations:

1. Calculate total variable labor cost for September. Round your answer to nearest whole number. $fill in the blank 1

2. Calculate total labor cost for September. Round your answer to nearest whole number. $fill in the blank 2

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