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		$7,200		340
	February		$10,099		530
	March		$8,340		610
	April		$9,987		590
	May		$8,690		460
	June		$7,731		330
	July		$9,690		550
	August		$7,650		290

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

Total Labor Cost = $7024 + ($2.16 x Employee Hours)

Required:

Assume that 695 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