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Pizza Vesuvio makes specialty pizzas. Data for the past 8 months were collected: Month Labor Cost Employee Hours January February March $7,000 360 8,140 550 9,899 630 April May June July August 9,787 610 8,490 480 7,450 350 9,490 570 7,531 310

Pizza Vesuvio makes specialty pizzas. Data for the past 8 months were collected: Month Labor Cost Employee Hours January February March $7,000 360 8,140 550 9,899 630 April May June July August 9,787 610 8,490 480 7,450 350 9,490 570 7,531 310

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Using High-Low to Calculate Fixed Cost, Calculate the Variable Rate, and
Construct a Cost Function
Refer to the information for Pizza Vesuvio on the previous page. Pizza
Vesuvio's controller wants to calculate the fixed and variable costs
associated with labor used in the restaurant.
Required:
Using the high-low method, calculate the fixed cost of labor, calculate
the variable rate per employee hour, and construct the cost formula for
total labor cost.
Use the following information for Brief Exercises 3-17 through 3-20:

Pizza Vesuvio makes specialty pizzas. Data for the past 8 months were collected: Month Labor Cost Employee Hours January February March $7,000 360 8,140 550 9,899 630 April May June July August 9,787 610 8,490 480 7,450 350 9,490 570 7,531 310
Transcribed Image Text:Pizza Vesuvio makes specialty pizzas. Data for the past 8 months were collected: Month Labor Cost Employee Hours January February March $7,000 360 8,140 550 9,899 630 April May June July August 9,787 610 8,490 480 7,450 350 9,490 570 7,531 310
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