# 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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