value 3.50 points Gino\'s Restaurant is a popular restaurant in Boston, Massachu
ID: 2337831 • Letter: V
Question
value 3.50 points 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 Measure Serving a party of diners Serving a diner Serving drinks Number of parties served Number of diners served Number of drinks ordered Some costs, such as the cost of cleaning the linens that cover the restaurant's tables, vary with the number of parties served. Other costs, such as washing plates and glasses, depends on the number of diners served or the number of drinks served Data concerning these activities are shown below Serving a Party Servinga Dinner Serving DrinksTotal $260.400 $153.000 $59,800 Total cost Total activity $47,600 7,000 parties 30.000 diners 46,000 drinks ,Prior to the activity-based costing study, the owner knew very itte about the costs of the restaurant She knew that the total cost for the month was $260,400 and that 30,000 diners had been served Therefore. the average cost r diner was $8 68 (5260 400+ 30 000 diners 58 68 per dinen) Required 1. Compute the activity rates for each of the three activitios (Round your answers to 2 declnal places) Cost per unit of activity Serving a Party Serving a Diner per party per dinerExplanation / Answer
STATEMENT SHOWING ACTIVITY RATE OF ACTIVITY POOL Activity Total Expected Activity ACTIVITY COST POOL Measures Overheads Activity Rate Serving a prty of diners number of parties 47,600 7,000 6.80 Per party Serving a dinner Number of dinners 153,000 30,000 5.10 Per dinner Serving a drink Number of drinks 59,800 46,000 1.30 Per drink Req 2. a. A party of 4 dinners who order 3 drinks in total Activity cost: One Party 6.8 4 Dinners 20.4 3 Drinks 3.9 Total cost 31.1 b. A party of two dinner with no drink Activity cost: One Party 6.8 2 Dinners 10.2 Total cost 17 C. A Party of 1 dinner who order 2 drinks Activity cost: One party 6.8 1 Dinner 5.1 2 Drinks 2.6 Total cost 14.5 Req 3. Average cost per dinners: Situation-a Average cost per dinner = 31.10 /4 = $ 7.775 per dinner Situation-b Average cost per dinner =17 / 2 = 8.50 per dinner Situation-c: Average cost per dinner = 14.50 /1 = $ 14.50 per dinner
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.