Solution-Construct the cost formula for total labor cost

Construct the cost formula for total labor cost

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Reference no: EM131115811

Using Regression to Calculate Fixed Cost, Calculate the Variable Rate, Construct a Cost Formula, and Determine Budgeted Cost

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

Month	Labor Cost	Employee Hours
January	$7,000	360
February	8,140	550
March	9,899	630
April	9,787	590
May	8,490	480
June	7,450	350
July	9,490	570
August	7,531	310

Coefficients shown by a regression program for Pizza Vesuvio's data are:

Intercept	4,481
X Variable	8.32

Required:

Use the results of regression to make the following calculations:

1. Calculate the fixed cost of labor. Calculate the variable rate per employee hour.

2. Construct the cost formula for total labor cost.

3. Calculate the budgeted cost for next month, assuming that 670 employee hours are budgeted.

Reference no: EM131115811

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Construct the cost formula for total labor cost

Reference no: EM131115811

Reference no: EM131115811

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