Activity Cost Pool Serving a party of diners Number of parties served Serving a

Question

Activity Cost Pool Serving a party of diners Number of parties served Serving a diner Serving a drink Total Cost Total Activity 15,600 5,200 parties $ 91,960 12,100 diners $32,960 10,300 drinks Activity Measure Number of diners served Number of drinks ordered The above costs include all of the costs of the restaurant except for organization-sustaining costs such as rent, property taxes, and top-management salaries 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 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 (including organization-sustaining costs) was $180,000 and that 12,000 diners had been served. Therefore, the average cost per diner was $15 Required: 1. According to the activity-based costing system, what is the total cost of serving each of the following parties of diners? (Round your intermediate calculations and final answers to 2 decimal places.) Total Cost A party of three diners who order four drinks in total b.A party of five diners who do not order any drinks c. A party of one diner who orders four drinks 2. Convert the total costs you computed in (1) above to costs per diner. In other words, what is the average cost per diner for serving each of the following parties? (Round your intermediate calculations and final answers to 2 decimal places.) Average Cost a. A party of three diners who order four drinks in total b.A party of five diners who do not order any drinks c. A party of one diner who orders four drinks per diner er diner er diner

Explanation / Answer

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Activity rate serving a party of diners 15600/5200 $ 3 parties serving a diner 91960/12100 $ 7.6 diner serving a drink 32960/10300 3.2 per drink

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