Question 5 (of 9) Save& Exit 11 Submit Time remaining: 0:41:26 5. velue: 9.00 po

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Question 5 (of 9) Save& Exit 11 Submit Time remaining: 0:41:26 5. velue: 9.00 points Hiram's Lakeside is a popular restaurant located on Lake Washington in Seatile. 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 three major activities and then completed the first-stage allocations of costs to the activity cost pools. The results appear below. Activity Cost Pool Serving a party of diners Serving a diner Serving a drink Number of parties served Number of diners served Number of drinks ordered Activity MeaseTotal Cos Total Activity 13,770 5,100 parties $ 116.48012.800 diners 31,900 11,000 drinks The above costs include all of the costs of the restaurant except for organization-sustaining costs such as rent, property taxes and top-management salaries. 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, depend on the number of diners served or the number of drinks served. 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 (including organization-sustaining costs) was $180,000 and that 12,000 diners had been served. Therefore, the average cost per diner was $15 Required According to the activity-based costing system, what is the total cost of serving each of the following partios of dinors? Round your intermediate calculations and final answers to 2 decimal places) Total Cost a. A party of one diners who order one drinks in total. b. A party of two diners who do not order any drinks. c. A party of one diner who orders three drinks

Explanation / Answer

1.

Cost Activity Per party cost Serving a party No of parties 13770 5100 2.7 Serving a diner No of diners 116480 12800 9.1 Serving a drink No of drinks 31900 11000 2.9 a A party of one diner who order one drink in total Units Serving a party 2.70 1 Serving a diner 9.10 1 Serving a drink 2.90 1 Total 14.70 b A party of two diners who do not order any drink Units Serving a party 2.70 1 Serving a diner 9.10 2 Serving a drink 2.90 0 Total 20.90 C A party of two diners who do not order any drink Units Serving a party 2.70 1 Serving a diner 9.10 1 Serving a drink 2.90 3 Total 20.50

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