Cornerstones of Managerial Accounting 6th Edition by Maryanne Mowen,Don Hansen ,Dan Heitger

Exercise 26

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

Refer to the information for Pizza Vesuvio above. Pizza Vesuvio's controller wants to calculate the fixed and variable costs associated with labor used in the restaurant.
Required:
Using the high-low method, calculate the fixed cost of labor, calculate the variable rate per employee hour, and construct the cost formula for total labor cost.