# Using High-Low to Calculate Fixed Cost, Calculate the Variable Rate, and Construct a Cost Function Pizza Vesuvio makes specialty pizzas. Data for the

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 eight months were collected: Month Labor Cost(\$) Employee Hours January 8,328 390 February 13,045 590 March 13,708 620 April 10,392 470 May 12,161 550 June 9,507 430 July 10,947 660 August 11,276 510 Pizza Vesuvios 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. If required, round your final answers 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)

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