# Using High-Low to Calculate Predicted Total Variable Cost and Total Cost for Budgeted Output Using High-Low to Calculate Predicted Total Variable Cost and Total Cost for Budgeted Output

Pizza Vesuvio makes specialty pizzas. Data for the past eight months were collected:

Month
Labor Cost
Employee Hours

January

\$7,000

390

February

\$8,140

580

March

\$9,899

690

April

\$9,787

640

May

\$8,490

510

June

\$7,450

380

July

\$9,490

600

August

\$7,531

340

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

Total Labor Cost = \$5229 + (\$6.77 x Employee Hours)

Required:
Assume that 675 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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