2. vnlue: 10.00 points Gino\'s Restaurant is a popular restaurant in Boston, Mas

Question

2. vnlue: 10.00 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 Serving a DinnerServing Drinks $159,000 Total 274,500 Total cost Total activity $37,500 $78,000 5,000 partios 30,000 diners 52,000 drinks 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 $274,500 and that 30,000 diners had been served. Therefore, the average cost per diner was $9.15 ($274,500 30,000 diners $9.15 per diner). Required: 1. Compute the activity rates for each of the three activities. (Round your answers to 2 decimal places.) Cost per unit of activi Serving a Party Serving a Diner Serving Drinks per party per diner per drink

Explanation / Answer

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cost per unit of activity serving a party 37500/5000=$ 7.5 per party serving a Diner 159000/30000=$ 5.3 per Diner serving Drinks 78000/52000 = $ 1.5 per drink

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