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 as follows:
| Month | Labor Cost | Employee Hours |
|---|---|---|
| January | $6,800 | 420 |
| February | $9,699 | 610 |
| March | $7,940 | 710 |
| April | $9,587 | 670 |
| May | $8,290 | 540 |
| June | $7,331 | 410 |
| July | $9,290 | 630 |
| August | $7,250 | 370 |
From this data, the following cost formula for monthly labor cost was estimated:
Total Labor Cost=6,499+(2.03×Employee Hours)Required:
Assume that 665 employee hours are budgeted for the month of September. Use the above cost formula to answer the following:
Calculate the total variable labor cost for September. (Round your answer to the nearest whole number.)
Answer: $ __________Calculate the total labor cost for September. (Round your answer to the nearest whole number.)
Answer: $ __________
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