Problem 7-22 Activity Rates and Activity-Based Management [LO2, LO3] Onassis Catering is a Greek company that provides passenger and crew meals to airlines operating out of two international airports in Athens and Corfu. The operations at the two airports are managed separately, and top management belleves that there may be benefits to greater sharing of information between the two operations. To better compare the two operations, an ABC system has been designed with the active participation of the managers at both airports. The ABC system is based on the following activity cost pools and activity measures: Activity Cost Pool Meal preparation Flight-related activities Customer service Other (costs of idle capacity and organization-sustaining costs) Activity Measure Number of meals Number of flights Number of customers NA The operation at Athens International Airport (AIA) serves 1 million meals annually on 5,000 flights for 10 different airlines. (Each airline is considered one customer.) The annual cost of running the AIA airport operation, excluding only the costs of raw materials for meals, totals 4,052,200. (Note: The currency in Greece is the euro, denoted by .) Annual Coat of the ATA Operation Cooks and delivery personnel vagen Kitchen supplies Chef salaries Equipment depreciation Administrative wages and salaries Building costa Total coat 3,220,000 40,700 250,000 97,000 242,500 194,000 4,052,200 To help determine the activity rates, employees were interviewed and asked how they divided their time among the four major activities. The results of employee interviews at AIA are displayed below: