Refer to the Pizza Vesuvio company information in Cornerstone Exercise 3-16. Assume that Pizza Vesuvio used this information to construct the following formula for monthly labor cost.
Total labor cost = $5,200 + ($7.52 × 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 year.
2. Calculate total fixed labor cost for the year.
3. Calculate total labor cost for the coming year.