Question 12 A local bed and breakfast, which is open 365 days per year, has the following cost information for last year: The total costs of servicing rooms and guests were $247,000 and 2,000 guests had stayed at the B & B. Therefore, the average cost per guest was $123.5. The B&B has identified four major activities and the following costs related to serving each room on a yearly basis: Activity Cost Pool Activity Measure Total Cost for the year Total Activity Cleaning a guest room # of guest rooms cleaned $20,000 800 guest rooms cleaned Serving a guest # of guests served $30,000 2000 guests Serving a breakfast # of breakfasts ordered $12,000 1,500 breakfasts Building Maintenance & Depreciation # square feet $185,000 9,000 sq. feet. Additional information: Although breakfast is included, some guests prefer to eat their own food or go for breakfast at the local diner. Each guest room may sleep anywhere from one to 4 people. The maintenance represents general maintenance on the building and its structure. The depreciation for the building is taken on a straight-line basis every year. The square footage per type of room is as follow: Standard room 300 sq feet Junior suite 400 sq feet Deluxe Suite 450 sq feet Required: 1. Using Activity Based Costing (ABC costing), what is the total cost of serving each of the following groups of guests for one night? (9 marks) I. A lone guest who eats breakfast at the local diner. The guest selects a standard room. II. A family of 4, all of whom eat breakfast at the bed & breakfast. The family stays in a junior suite. Ill. A married couple, who are vegetarian and brought their own breakfast. The couple stays in a standard room. 2. What is the average cost per guest per night for each of the groups noted in part 1) above? Why do the costs per guest differ from each other? (2 marks) 3. Considering the results obtained in part 2, briefly explain what are the main benefits of using activity-based costing analysis when analyzing the average cost per guest