Pizza vesuvio makes specialty pizzas vesuvios controller

Reference no: EM13452408

Using High-Low to Calculate Fixed Cost, Calculate the Variable Rate, and Construct a Cost Function

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

Month                                     Labor Cost($)              Employee Hours

January                        6,900                                       350

February                      8,040                                       540

March                          9,799                                       640

April                            9,687                                       600

May                             8,390                                       470

June                             7,350                                       340

July                              9,390                                       560

August                        7,431                                       300

In your calculations, round the variable rate per employee to the nearest cent. If required, round your final answers to the nearest cent.

1. Using the high-low method, calculate the fixed cost of labor.

2. Using the high-low method, calculate the variable rate.

$ per employee hour

3. Using the high-low method, construct the cost formula for total labor cost.

Total labor cost = $ + ($ × Employee hours)

Reference no: EM13452408

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