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AccountingManagerial Accounting: The Cornerstone of Business Decision-MakingUsing High-Low to Calculate Predicted Total Variable Cost and Total Cost for Budgeted Output Refer to the information for Pizza Vesuvio on the previous page. Assume that this information was used to construct the following formula for monthly labor cost. Total Labor Cost = $ 5 , 237 + ( $ 7.40 × Employee Hours) Required: Assume that 675 employee hours are budgeted for the month of September. Use the total labor cost formula for the following calculations: 1. Calculate total variable labor cost for September. 2. Calculate total labor cost for September.BuyFind*arrow_forward*

7th Edition

Maryanne M. Mowen + 2 others

Publisher: Cengage Learning

ISBN: 9781337115773

Chapter 3, Problem 18BEA

Textbook Problem

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Using High-Low to Calculate Predicted Total Variable Cost and Total Cost for Budgeted Output

Refer to the information for Pizza Vesuvio on the previous page. Assume that this information was used to construct the following formula for monthly labor cost.

Required:

Assume that 675 employee hours are budgeted for the month of September. Use the total labor cost formula for the following calculations:

- 1. Calculate total variable labor cost for September.
- 2. Calculate total labor cost for September.

Expert Solution

**1.**

To determine

Compute the value of total variable labor costs for the month of September.

**Variable Cost:**

Variable cost is the cost which varies due to the changes in the level of output to produce products and services in a relevant range.

Use the following formula to calculate total variable labor costs for the month of September:

Substitute $7

Expert Solution

**2.**

To determine

Compute the value of total labor costs for the month of September.

Managerial Accounting: The Cornerstone of Business Decision-Making

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