Cathy, the manager of Cathy's Catering, Inc., uses activity-based costing to compute the costs of her catered parties. Each party is limited to 20 guests and requires four people to serve and clean up. Cathy offers two types of parties, an afternoon picnic and an evening formal dinner. The breakdown of the costs follows:

Per party costs do not vary with the number of guests.

Required
a. Compute the cost of a 20-guest afternoon picnic.
b. Compute the cost of a 20-guest evening formal dinner.
c. How much should Cathy charge for each guest for each type of party if she wants to cover hercosts?

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Formal Dinner Activities (and cost drivers) Advertising (parties).... Renting equipment.. . Afternoon Picnic $80 per party $100 per party $60 per party plus $16 per guest $320 per party $80 per party $60 per party $40 per party plus $8 per guest (parties, guests) Obtaining insurance (parties). $160 per party Serving (parties, servers). . . .. .. $40 per server per party $60 per server per party Preparing food (guests). $16 per guest $24 per guest