S Gino's Restaurant is a popular restaurant in Boston, Massachusetts. The owner of the restaurant has...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
S 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 $ 51,000 $ 124,000 6,000 parties Serving a Diner 20,000 diners Serving Drinks $ 95,200 56,000 drinks Total $ 270,200 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 $270,200 and that 20,000 diners had been served. Therefore, the average cost per diner was $13.51 ($270,200 20,000 diners $13.51 per diner). 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. < Prev 7 of 7 Next S 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 $ 51,000 $ 124,000 6,000 parties Serving a Diner 20,000 diners Serving Drinks $ 95,200 56,000 drinks Total $ 270,200 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 $270,200 and that 20,000 diners had been served. Therefore, the average cost per diner was $13.51 ($270,200 20,000 diners $13.51 per diner). 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. < Prev 7 of 7 Next
Expert Answer:
Answer rating: 100% (QA)
1 Compute the activity rates for each of the three activities Serving a Party Activity rate Total co... 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:
Students also viewed these accounting questions
-
Sometimes politicians propose a "flat" income tax, where everybody pays the same percentage of their income, no matter how much they make. They argue that this is more fair that a "progressive"...
-
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...
-
1. Evaluate the term "health" and the historical perspective on health promotion. 2. Examine health promotion and illness prevention teaching based on teaching principles, varied teaching learning...
-
What are the main differences between currency swaps, options, and futures?
-
Matrix Toy Company sells toys and games to retail stores. The firm offers a trade discount of 40 percent on toys and 30 percent on games. Its credit sales and sales returns and allowances...
-
Find the dynamic response of the stepped bar shown in Fig. 12.37 (a) when its free end is subjected to the load given in Fig. 12.37(b). P(t) Arca - 4A Area A Po P(1) (a) FIGURE 12.37 Stepped bar with...
-
The CAB Partnership, although operating profitably, has had a cash flow problem. Unable to meet its current commitments, the firm borrowed $34,000 from a bank giving a long-term note. During a recent...
-
Ehrlich Co. began business on January 2, 20Y8. Salaries were paid to employees on the last day of each month, and social security tax, Medicare tax, and federal income tax were withheld in the...
-
Peachtree company manufactures peach jam. because of bad weather, its peach crop was small. the following data have been gathered for the summer quarter of 2009: beginning inventory (cases) 0 cases...
-
5. XYZ Limited was incorporated on January 4, 1985. The entity's reporting date is December 31st of each year. On the date of incorporation, the entity issued 100,000,000 ordinary shares with a par...
-
You want to begin saving for your daughter to go to graduate school at Oklahoma starting 10 years from now. You expect that you will need to make tuition payments of $3.000 per month for the two...
-
Using the Internet analyze a particular current event in finance (or economics) using at least three sources. You will summarize your current event or topic and support your viewpoints and...
-
Mortgage companies usually charge interest semi-annually. What would be the effective rate of interest on a mortgage at 4.25 percent compounded semi-annually?
-
Expected return - D 0 = $3.00, P 0 = $45, g = 2.0% Required Return - r rf = 2%, r m = = 10%, b= 0.9 With that background in mind, address the following questions. a) Is this stock in equilibrium?...
-
Prepare an application paper to help you initiate a concept of Psychology (Self-Efficacy) into your present life. Follow the guideline points: A. One outside source needs to be referenced. B. Discuss...
-
Wholesalers Ltd. deals in the sale of foodstuffs to retailers. Owing to economic depression, the firm intends to relax its credit policy to boost productivity and sales. The firms current credit...
-
Using the Wilson method with \(\theta=1.4\), solve Problem 11.20. Data From Problem 11.20:- The equations of motion of a two-degree-of-freedom system are given by \(2 \ddot{x}_{1}+6 x_{1}-2 x_{2}=5\)...
-
Using the Wilson method with \(\theta=1.4\), solve Problem 11.19. 2 618-10-050} 2 4x2 +5 F(t) 3 o
-
Using the Newmark method with \(\alpha=\frac{1}{6}\) and \(\beta=\frac{1}{2}\), solve Problem 11.18. Data From Problem 11.18:- Using the central difference method, find the response of the...
Study smarter with the SolutionInn App