Using Regression to Calculate Fixed Cost, Calculate the Variable Rate, Construct a Cost Formula, and Determine Budgeted Cost

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
August		7,531			310

Coefficients shown by a regression program for Pizza Vesuvio's data are:

Intercept	4,517
X Variable	8.20

In your calculations, round the variable rate per employee hour to the nearest cent.

Required:

Use the results of regression to make the following calculations:

1. Calculate the fixed cost of labor. $

Calculate the variable rate per employee hour. $per employee hour

2. Construct the cost formula for total labor cost.

Total labor cost = $ + ($ Employee hours)

3. Calculate the budgeted cost for next month, assuming that 675 employee hours are budgeted. $

Using Regression to Calculate Fixed Cost, Calculate the Variable Rate, Construct a Cost Formula, an Determine Budgeted Cost Pizza Vesuvio makes specialty pizzas. Data for the past 8 months were collected: Month January February March April May June July August Coefficients shown by a regression program for Pizza Vesuvio's data are: Intercept X Variable In your calculations, round the variable rate per employee hour to the nearest cent. Required Use the results of regression to make the following calculations: 1. Calculate the fixed cost of labor. Labor Cost Employee Hours $7,000 8,140 9,899 9,787 8,490 7,450 9,490 7,531 360 550 630 610 480 350 570 310 4,517 8.20 Calculate the variable rate per employee hour. per employee hour 2. Construct the cost formula for total labor cost. Total labor cost - x Employee hours)