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 8 months were collected: Month Labor Cost Employee Hours January $7,000 360 February 8,140 550 March 9,899 630 April 9,787 600 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 4,497 X Variable 8.26 In your calculations, round the variable rate per employee hour to the nearest cent. Required: Use the results of regression to make the following calculations: 1. Calculate the fixed cost of labor. $fill in the blank 1 Calculate the variable rate per employee hour. $fill in the blank 2per employee hour 2. Construct the cost formula for total labor cost. Total labor cost = $fill in the blank 3 + ($fill in the blank 4 × Employee hours) 3. Calculate the budgeted cost for next month, assuming that 695 employee hours are budgeted. Round answer to the nearest dollar. $fill in the blank 5
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 8 months were collected: Month Labor Cost Employee Hours January $7,000 360 February 8,140 550 March 9,899 630 April 9,787 600 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 4,497 X Variable 8.26 In your calculations, round the variable rate per employee hour to the nearest cent. Required: Use the results of regression to make the following calculations: 1. Calculate the fixed cost of labor. $fill in the blank 1 Calculate the variable rate per employee hour. $fill in the blank 2per employee hour 2. Construct the cost formula for total labor cost. Total labor cost = $fill in the blank 3 + ($fill in the blank 4 × Employee hours) 3. Calculate the budgeted cost for next month, assuming that 695 employee hours are budgeted. Round answer to the nearest dollar. $fill in the blank 5
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter3: Cost Behavior And Cost Forecasting
Section: Chapter Questions
Problem 20BEA: Using Regression to Calculate Fixed Cost, Calculate the Variable Rate, Construct a Cost Formula, and...
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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 8 months were collected:
| Month | Labor Cost | Employee Hours | ||
| January | $7,000 | 360 | ||
| February | 8,140 | 550 | ||
| March | 9,899 | 630 | ||
| April | 9,787 | 600 | ||
| 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 | 4,497 |
| X Variable | 8.26 |
In your calculations, round the variable rate per employee hour to the nearest cent.
Required:
Use the results of regression to make the following calculations:
1. Calculate the fixed cost of labor.
$fill in the blank 1
Calculate the variable rate per employee hour.
$fill in the blank 2per employee hour
2. Construct the cost formula for total labor cost.
Total labor cost = $fill in the blank 3 + ($fill in the blank 4 × Employee hours)
3. Calculate the budgeted cost for next month, assuming that 695 employee hours are budgeted. Round answer to the nearest dollar.
$fill in the blank 5
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