Using High-Low to Calculate Fixed Cost, Calculate the Variable Rate, and Constru

Question

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 8 months were collected:

Pizza Vesuvio's controller wants to calculate the fixed and variable costs associated with labor used in the restaurant.

In your calculations, round the variable rate per employee hour to the nearest cent.

Required:

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]

Month Labor Cost Employee Hours January $7,000   360 February 8,140 550 March 9,899 630 April 9,787 610 May 8,490 480 June 7,450 350 July 9,490 570 August 7,531 310 /T tot 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 8 months were collected: Month Labor Cost Employee Hours January February March April May June July August Pizza Vesuvio's controller wants to calculate the fixed and variable costs associated with labor used in th restaurant. $7,000 8,140 9,899 9,787 8,490 7,450 9,490 7,531 360 550 630 610 480 350 570 310 In your calculations, round the variable rate per employee hour to the nearest cent. Required 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- x Employee hours] Feedback Check My Work

Explanation / Answer

1.

2.

3.  

Working:

$5,237.00

Related Questions

Navigate

• Browse (All)
• Browse U
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.