5 value 1.00 points Gino\'s Restaurant is a popular restaurant in Boston, Massac

Question

5 value 1.00 points Gino's Restaurant is a popular restaurant in Boston, Massachusetts. The owner of the restaurant has been trying to better understand costs at the restaurant and has hired a student intern to conduct an activity- based costing study. The intern, in consultation with the owner, identified the following major activities Activity Cost Pool Serving a party of diners Serving a diner Serving drinks Activity Measure Number of parties served Number of diners served Number of drinks ordered Some costs, such as the cost of cleaning the linens that cover the restaurant's tables, vary with the number of parties served. Other costs, such as washing plates and glasses, depends on the number of diners served or the number of drinks served Data concerning these activities are shown below Total $313,600 Serving a Party Serving Drinks $69,600 Serving a Dinner Total cost $32,800 $211,200 Total activity 8,000 parties 32,000 diners 58,000 drinks Prior to the activity-based costing study, the owner knew very little about the costs of the restaurant. She knew that the total cost for the month was $313,600 and that 32,000 diners had been served. Therefore the average cost per diner was $9.80 ($313,600 32,000 diners $9.80 per diner) Required: 1. Compute the activity rates for each of the three activities. (Round your answers to 2 decimal places.) Cost per unit of activit Serving a Party4.10 per party Serving a Diner 6.60 per diner Serving Drinks$ 1.20 per drink

Explanation / Answer

Answers

Question 2(a)

Question 2(b)

Question 2(c)

Cost pool

Activity rate per activity (A)

No. of activity (B)

Cost ( A x B)

No. of activity (C)

Cost ( A x C)

No. of activity (D)

Cost ( A x D)

Serving a party

$                   4.10

per party

1

$                    4.10

1

$                     4.10

1

$                   4.10

Serving a diner

$                   6.60

per diner

4

$                  26.40

2

$                   13.20

1

$                   6.60

Serving drinks

$                   1.20

per drink

3

$                    3.60

0

$                          -  

2

$                   2.4

Total cost

$                  34.10

Total cost

$                   17.30

Total cost

$                 13.1

No. of diners

4

No. of diners

2

No. of diners

1

Cost per diner

$                    8.53

Cost per diner

$                     8.65

Cost per diner

$                13.1

TOTAL COST

Party of 4 diners, orders 3 drinks

$                34.10

Party of 2 diners, orders 0 drinks

$                17.30

Party of 1 diner, orders 2 drinks

$                13.1

Average cost

Party of 4 diners, orders 3 drinks

$                   8.53   per diner

Party of 2 diners, orders 0 drinks

$                   8.65 per diner

Party of 1 diner, orders 2 drinks

$                13.10 per diner

Question 2(a)

Question 2(b)

Question 2(c)

Cost pool

Activity rate per activity (A)

No. of activity (B)

Cost ( A x B)

No. of activity (C)

Cost ( A x C)

No. of activity (D)

Cost ( A x D)

Serving a party

$                   4.10

per party

1

$                    4.10

1

$                     4.10

1

$                   4.10

Serving a diner

$                   6.60

per diner

4

$                  26.40

2

$                   13.20

1

$                   6.60

Serving drinks

$                   1.20

per drink

3

$                    3.60

0

$                          -  

2

$                   2.4

Total cost

$                  34.10

Total cost

$                   17.30

Total cost

$                 13.1

No. of diners

4

No. of diners

2

No. of diners

1

Cost per diner

$                    8.53

Cost per diner

$                     8.65

Cost per diner

$                13.1

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