Question: 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

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 $6,900 430

February $9,799 620

March $8,040 710

April $9,687 680

May $8,390 550

June $7,431 420

July $9,390 640

August $7,350 380

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

Total Labor Cost = $6556 + ($2.09 x Employee Hours)

Required:

Assume that 685 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.

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