Gino's Restaurant is a popular restaurant in Boston, Massachusetts. The owner of the restaurant has been...
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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 A group of diners who ask to sit at the same table is counted as a party. Some costs, such as the costs of cleaning linen, are the same whether one person is at a table or the table is full. Other costs, such as washing dishes, depend on the number of diners served. Data concerning these activities are shown below: Total cost Total activity Serving a Party $ 38,400 6,000 parties Serving a Diner $ 67,000 10,000 diners b. A party of two diners who do not order any drinks. c. A lone diner who orders two drinks. Serving Drinks $ 57,600 48,000 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 $163,000 and that 10,000 diners had been served. Therefore, the average cost per diner was $16.30 ($163,000 + 10,000 diners $16.30 per diner). Total $ 163,000 Required: 1. Compute the activity rates for each of the three activities. 2. According to the activity-based costing system, what is the total cost of serving each of the following parties of diners? a. A party of four diners who order three drinks in total. b. A party of two diners who do not order any drinks. c. A lone diner who orders two drinks. 3. Convert the total costs you computed in part (2) above to costs per diner. In other words, what is the average cost per diner for serving each of the following parties? a. A party of four diners who order three drinks in total. Required: 1. Compute the activity rates for each of the three activities. 2. According to the activity-based costing system, what is the total cost of serving each of the following parties of diners? a. A party of four diners who order three drinks in total. b. A party of two diners who do not order any drinks. c. A lone diner who orders two drinks. 3. Convert the total costs you computed in part (2) above to costs per diner. In other words, what is the average cost per diner for serving each of the following parties? a. A party of four diners who order three drinks in total. b. A party of two diners who do not order any drinks. c. A lone diner who orders two drinks. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute the activity rates for each of the three activities. (Round your answers to 2 decimal places.) Cost per Unit of Activity per party per diner per drink Serving a Party Serving a Diner Serving Drinks Required 1 Required 2 > Required: 1. Compute the activity rates for each of the three activities. 2. According to the activity-based costing system, what is the total cost of serving each of the following parties of diners? a. A party of four diners who order three drinks in total. b. A party of two diners who do not order any drinks. c. A lone diner who orders two drinks. 3. Convert the total costs you computed in part (2) above to costs per diner. In other words, what is the average cost per diner for serving each of the following parties? a. A party of four diners who order three drinks in total. b. A party of two diners who do not order any drinks. c. A lone diner who orders two drinks. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 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.) a. A party of four diners who order three drinks in total b. A party of two diners who do not order any drinks c. A lone diner who orders two drinks < Required 1 Total Required 3 Required: 1. Compute the activity rates for each of the three activities. 2. According to the activity-based costing system, what is the total cost of serving each of the following parties of diners? a. A party of four diners who order three drinks in total. b. A party of two diners who do not order any drinks. c. A lone diner who orders two drinks. 3. Convert the total costs you computed in part (2) above to costs per diner. In other words, what is the average cost per diner for serving each of the following parties? a. A party of four diners who order three drinks in total. b. A party of two diners who do not order any drinks. c. A lone diner who orders two drinks. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Convert the total costs you computed in part (2) 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.) a. A party of four diners who order three drinks in total b. A party of two diners who do not order any drinks c. A lone diner who orders two drinks < Required 2 Average Cost per diner per diner per diner Required 3 Marine, Incorporated, manufactures a product that is available in both a flexible and a rigid model. The company has made the rigid model for years; the flexible model was introduced several years ago to tap a new segment of the market. Since introduction of the flexible model, the company's profits have steadily declined, and management has become concerned about the accuracy of its costing system. Sales of the flexible model have been increasing rapidly. Overhead is applied to products on the basis of direct labor-hours. At the beginning of the current year, management estimated that $870,000 in overhead costs would be incurred and the company would produce and sell 1,000 units of the flexible model and 12,500 units of the regular model. The flexible model requires 3.0 hours of direct labor time per unit, and the regular model requires 1.50 hours. Direct materials and labor costs per unit are given below: Direct materials cost per unit Direct labor cost per unit Flexible $ 110 $ 25 Rigid Activity Cost Pool and Activity Measure Purchase orders (number of orders) Rework requests (number of requests) Product testing (number of tests) Machine related (machine-hours) $ 85 $ 15 Required: 1-a. Compute the predetermined overhead rate using direct labor-hours as the basis for allocating overhead costs to products. 1-b. Compute the unit product cost for one unit of each model. 2. An intern suggested that the company use activity-based costing to cost its products. A team was formed to investigate this idea. It came back with the recommendation that four activity cost pools be used. These cost pools and their associated activities are listed as follows: Expected Activity Estimated Overhead Cost Flexible $ 28,500 105 18,500 160,000 65 750 663,000 1,300 $ 870,000 Rigid 465 305 850 4,225 Total 570 370 1,600 5,525 Compute the activity rate for each of the activity cost pools. 3-a. Using activity-based costing, determine the total amount of overhead that would be assigned to each model for the year. 3-b. Using activity-based costing, compute the unit product cost for one unit of each model. Activate Go to Settin Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 2 Predetermined overhead rate Req 3A Compute the predetermined overhead rate using direct labor-hours as the basis for allocating overhead costs to products. per DLH Req 3B < Req 1A Req 1B > Complete this question by entering your answers in the tabs below. Req 1A Req 1B Flexible Rigid Req 2 Req 3A Compute the unit product cost for one unit of each model. Unit Product Cost < Req 1A Req 3B Req 2 > Complete this question by entering your answers in the tabs below. Req 1A Req 1B Purchase orders Rework requests Product testing Machine-related Req 2 Req 3A Compute the activity rate for each of the activity cost pools. Activity Cost Pool Activity Rate per order per request per test per MH < Req 1B Req 3B Req 3A Complete this question by entering your answers in the tabs below. Req 1A Req 1B Flexible Rigid Req 2 Total Amount of Overhead Req 3A Using activity-based costing, determine the total amount of overhead that would be assigned to each model for the year. Req 3B < Req 2 Req 3B > Complete this question by entering your answers in the tabs below. Req 1A Req 1B Flexible Rigid Req 2 Unit Product Cost Req 3A Using activity-based costing, compute the unit product cost for one unit of each model. (Do not round intermediate calculations and round your answers to 2 decimal places.) Req 3B < Req 3A Req 3B 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 A group of diners who ask to sit at the same table is counted as a party. Some costs, such as the costs of cleaning linen, are the same whether one person is at a table or the table is full. Other costs, such as washing dishes, depend on the number of diners served. Data concerning these activities are shown below: Total cost Total activity Serving a Party $ 38,400 6,000 parties Serving a Diner $ 67,000 10,000 diners b. A party of two diners who do not order any drinks. c. A lone diner who orders two drinks. Serving Drinks $ 57,600 48,000 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 $163,000 and that 10,000 diners had been served. Therefore, the average cost per diner was $16.30 ($163,000 + 10,000 diners $16.30 per diner). Total $ 163,000 Required: 1. Compute the activity rates for each of the three activities. 2. According to the activity-based costing system, what is the total cost of serving each of the following parties of diners? a. A party of four diners who order three drinks in total. b. A party of two diners who do not order any drinks. c. A lone diner who orders two drinks. 3. Convert the total costs you computed in part (2) above to costs per diner. In other words, what is the average cost per diner for serving each of the following parties? a. A party of four diners who order three drinks in total. Required: 1. Compute the activity rates for each of the three activities. 2. According to the activity-based costing system, what is the total cost of serving each of the following parties of diners? a. A party of four diners who order three drinks in total. b. A party of two diners who do not order any drinks. c. A lone diner who orders two drinks. 3. Convert the total costs you computed in part (2) above to costs per diner. In other words, what is the average cost per diner for serving each of the following parties? a. A party of four diners who order three drinks in total. b. A party of two diners who do not order any drinks. c. A lone diner who orders two drinks. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute the activity rates for each of the three activities. (Round your answers to 2 decimal places.) Cost per Unit of Activity per party per diner per drink Serving a Party Serving a Diner Serving Drinks Required 1 Required 2 > Required: 1. Compute the activity rates for each of the three activities. 2. According to the activity-based costing system, what is the total cost of serving each of the following parties of diners? a. A party of four diners who order three drinks in total. b. A party of two diners who do not order any drinks. c. A lone diner who orders two drinks. 3. Convert the total costs you computed in part (2) above to costs per diner. In other words, what is the average cost per diner for serving each of the following parties? a. A party of four diners who order three drinks in total. b. A party of two diners who do not order any drinks. c. A lone diner who orders two drinks. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 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.) a. A party of four diners who order three drinks in total b. A party of two diners who do not order any drinks c. A lone diner who orders two drinks < Required 1 Total Required 3 Required: 1. Compute the activity rates for each of the three activities. 2. According to the activity-based costing system, what is the total cost of serving each of the following parties of diners? a. A party of four diners who order three drinks in total. b. A party of two diners who do not order any drinks. c. A lone diner who orders two drinks. 3. Convert the total costs you computed in part (2) above to costs per diner. In other words, what is the average cost per diner for serving each of the following parties? a. A party of four diners who order three drinks in total. b. A party of two diners who do not order any drinks. c. A lone diner who orders two drinks. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Convert the total costs you computed in part (2) 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.) a. A party of four diners who order three drinks in total b. A party of two diners who do not order any drinks c. A lone diner who orders two drinks < Required 2 Average Cost per diner per diner per diner Required 3 Marine, Incorporated, manufactures a product that is available in both a flexible and a rigid model. The company has made the rigid model for years; the flexible model was introduced several years ago to tap a new segment of the market. Since introduction of the flexible model, the company's profits have steadily declined, and management has become concerned about the accuracy of its costing system. Sales of the flexible model have been increasing rapidly. Overhead is applied to products on the basis of direct labor-hours. At the beginning of the current year, management estimated that $870,000 in overhead costs would be incurred and the company would produce and sell 1,000 units of the flexible model and 12,500 units of the regular model. The flexible model requires 3.0 hours of direct labor time per unit, and the regular model requires 1.50 hours. Direct materials and labor costs per unit are given below: Direct materials cost per unit Direct labor cost per unit Flexible $ 110 $ 25 Rigid Activity Cost Pool and Activity Measure Purchase orders (number of orders) Rework requests (number of requests) Product testing (number of tests) Machine related (machine-hours) $ 85 $ 15 Required: 1-a. Compute the predetermined overhead rate using direct labor-hours as the basis for allocating overhead costs to products. 1-b. Compute the unit product cost for one unit of each model. 2. An intern suggested that the company use activity-based costing to cost its products. A team was formed to investigate this idea. It came back with the recommendation that four activity cost pools be used. These cost pools and their associated activities are listed as follows: Expected Activity Estimated Overhead Cost Flexible $ 28,500 105 18,500 160,000 65 750 663,000 1,300 $ 870,000 Rigid 465 305 850 4,225 Total 570 370 1,600 5,525 Compute the activity rate for each of the activity cost pools. 3-a. Using activity-based costing, determine the total amount of overhead that would be assigned to each model for the year. 3-b. Using activity-based costing, compute the unit product cost for one unit of each model. Activate Go to Settin Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 2 Predetermined overhead rate Req 3A Compute the predetermined overhead rate using direct labor-hours as the basis for allocating overhead costs to products. per DLH Req 3B < Req 1A Req 1B > Complete this question by entering your answers in the tabs below. Req 1A Req 1B Flexible Rigid Req 2 Req 3A Compute the unit product cost for one unit of each model. Unit Product Cost < Req 1A Req 3B Req 2 > Complete this question by entering your answers in the tabs below. Req 1A Req 1B Purchase orders Rework requests Product testing Machine-related Req 2 Req 3A Compute the activity rate for each of the activity cost pools. Activity Cost Pool Activity Rate per order per request per test per MH < Req 1B Req 3B Req 3A Complete this question by entering your answers in the tabs below. Req 1A Req 1B Flexible Rigid Req 2 Total Amount of Overhead Req 3A Using activity-based costing, determine the total amount of overhead that would be assigned to each model for the year. Req 3B < Req 2 Req 3B > Complete this question by entering your answers in the tabs below. Req 1A Req 1B Flexible Rigid Req 2 Unit Product Cost Req 3A Using activity-based costing, compute the unit product cost for one unit of each model. (Do not round intermediate calculations and round your answers to 2 decimal places.) Req 3B < Req 3A Req 3B
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Ginos Restaurant 1Compute the activity rate for each of the three activities Amount in ab Activity R... View the full answer
Related Book For
Introduction to Managerial Accounting
ISBN: 978-0078025792
7th edition
Authors: Peter Brewer, Ray Garrison, Eric Noreen
Posted Date:
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