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

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

	Month	Labor Cost	Employee Hours
	January		$7,000		390
	February		$8,140		580
	March		$9,899		690
	April		$9,787		640
	May		$8,490		510
	June		$7,450		380
	July		$9,490		600
	August		$7,531		340

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

Total Labor Cost = $5229 + ($6.77 x 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. Round your answer to nearest whole number. $

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