Question: Using High-Low to Calculate Predicted Total Variable Cost and Total Cost for Budgeted Output Refer to the information for Pizza Vesuvio above. Assume that this
Using High-Low to Calculate Predicted Total Variable Cost and Total Cost for Budgeted Output Refer to the information for Pizza Vesuvio above. Assume that this information was used to construct the following formula for monthly labor cost.
Pizza Vesuvio makes specialty pizzas. Data for the past 8 months were collected:
Month Labor Cost Employee Hours January $7,000 360 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
Total Labor Cost = $5,237 + ($7.40 × Employee Hours)
Required:
Assume that 675 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.
2. Calculate total labor cost for September.
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