Gino's Restaurant is a popular restaurant in Boston, Massachusetts. The owner of the restaurant has been trying
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Question:
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 activitybased costing study. The intern, in consultation with the owner, identified the following major activities:
tableActivity Cost Pool,Activity MeasureServing a party of diners,Number of parties servedServing a diner,Number of diners servedServing drinks,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:
tableServing a Party,Serving a Diner,Serving Drinks,TotalTotal cost$$$ drinks
Prior to the activitybased costing study, the owner knew very little about the costs of the restaurant She knew that the total cost for the month was $ and that diners had been served. Therefore, the average cost per diner was diners $ per diner
Required:
Compute the activity rates for each of the three activities.
According to the activitybased costing system, what is the total cost of serving each of the following parties of diners?
a A party of four diners who ordered three drinks total.
b A party of two diners who do not order any drinks.
c A lone diner who orders two drinks
Convert the total costs you computed in part 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 total
b A party of two diners who dont order any drinks
c A lone diner who orders two drinks
Related Book For
Introduction to Managerial Accounting
ISBN: 978-0078025792
7th edition
Authors: Peter Brewer, Ray Garrison, Eric Noreen
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