Using High-Low to Calculate Predicted Total Variable Cost and Total Cost for a Time Period that Differs from the Data Period

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

Month Labor Cost Employee Hours

January $7,300 360

February 10,199 550

March 8,440 630

April 10,087 610

May 8,790 480

June 7,831 350

July 9,790 570

August 7,750 310

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

Total Labor Cost = $7,080 + ($2.16 X Employee Hours)

Required:

Assume that 4,200 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 coming year. Round your answer to the nearest dollar.

$

9,072

2.Calculate total fixed labor cost for the coming year. Round your answer to the nearest dollar.

$

3.Calculate total labor cost for the coming year. Round your answer to the nearest dollar.

$