Homework Question

Bob Jones owns a catering company that stages banquets and parties for both individuals and companies. The business is seasonal, with heavy demand during the summer months and year-end holidays and light demand at other times. Bob has gathered the following cost information from the past year:

Month

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Labor Hours

Overhead Costs

January

2,500

$54,400

February

3,164

65,033

March

3,198

61,524

April

4,200

69,424

May

4,533

69,928

June

5,545

74,652

July

6,548

74,648

August

7,500

78,482

September

7,180

75,616

October

4,620

69,308

November

3,172

71,748

December

6,785

74,772

Total

58,945

$839,535

Using the high-low method, compute the overhead cost per labor hour and the fixed overhead cost per month. (Round variable cost to 2 decimal places, e.g. 12.25 and all other answer to 0 decimal places, e.g. 5,275.)

Variable cost

=

$

per labor hour

Fixed cost

=

 
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