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