Calculate the variable rate per employee hour

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Pizza Vesuvio makes specialty pizzas. Vesuvio's controller wants to calculate the fixed and variable costs associated with labour used in the restaurant. Data for the past eight months were collected:

Month             Labour Cost ($)             Employee Hours

January             7,000                          360

February          8,140                           550

March              9,010                          585

April                9,787                          610

May                8,490                          480

June                2,450                         350

July                 9,490                        570

August             7,531                        310

Required:

Problem 1: 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.

Reference no: EM132639632

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