Question: Using High-Low to Calculate the Variable Rate, Calculate Fixed Cost, and Construct a Cost Function Pizza Vesuvio makes specialty pizzas. Data for the past

Using High-Low to Calculate the Variable Rate, Calculate Fixed Cost, and Construct

Using High-Low to Calculate the Variable Rate, Calculate Fixed Cost, and Construct a Cost Function Pizza Vesuvio makes specialty pizzas. Data for the past 8 months were collected: Month Labor Cost Employee Hours January $7,000 360 February 8,140 550 March 9,899 630 April 9,787 610 May 8,490 480 June 7,450 350 July 9,490 570 7,531 310 August Pizza Vesuvio's controller wants to calculate the variable and fixed costs associated with labor used in the restaurant. In your calculations, round the variable rate per employee hour to the nearest cent. Required: 1. Using the high-low method, calculate the variable rate. $ X per employee hour 2. Using the high-low method, calculate the total fixed labor cost. X 3. Using the high-low method, construct the cost formula for total labor cost. $ Total labor cost = X +[$ Xx Employee hours]

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