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

Exercise 30

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:

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

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.
2. Calculate total labor cost for September.