Svenâs Cookhouse is a popular restaurant located on Lake Unionin Seattle. The owner of the restaurant has been trying to betterunderstand costs at the restaurant and has hired a student internto conduct an activity-based costing study. The intern, inconsultation with the owner, identified three major activities. Shethen completed the first-stage allocations of costs to the activitycost pools, using data from last monthâs operations. The resultsappear below:
Activity Cost Pool ActivityMeasure Total Cost Total Activity Serving a party of diners Number ofparties served $ 15,680 5,600 parties Serving a diner Number of dinersserved $ 103,320 12,600 diners Serving a drink Number of drinksordered $ 33,000 11,000 drinks
The above costs include all of the costs of the restaurantexcept for organization-sustaining costs such as rent, propertytaxes, and top-management salaries. A group of diners who ask tosit at the same table are counted as a party. Some costs, such asthe costs of cleaning linen, are the same whether one person is ata table or the table is full. Other costs, such as washing dishes,depend on the number of diners served.
Prior to the activity-basedcosting study, the owner knew very little about the costs of therestaurant. He knew that the total cost for the month (includingorganization-sustaining costs) was $180,000 and that 12,000 dinershad been served. Therefore, the average cost per diner was $15.
Required: 1. According to the activity-based costing system, what is thetotal cost of serving each of the following parties of diners?(Round your intermediate calculations and final answers to2 decimal places. Omit the "$" sign in your response.)
TotalCost a. A party of fourdiners who order four drinks in total. $ b. A party of threediners who do not order any drinks. $ c. A lone diner whoorders three drinks. $
2. Convert the total costs you computed in (1) above to costs perdiner. In other words, what is the average cost per diner forserving each of the following parties? (Round yourintermediate calculations and final answers to 2 decimal places.Omit the "$" sign in your response.)
Average Cost a. A party of fourdiners who order four drinks in total. $ per diner b. A party of threediners who do not order any drinks. $ per diner c. A lone diner whoorders three drinks. $ per diner
Svenâs Cookhouse is a popular restaurant located on Lake Unionin Seattle. The owner of the restaurant has been trying to betterunderstand costs at the restaurant and has hired a student internto conduct an activity-based costing study. The intern, inconsultation with the owner, identified three major activities. Shethen completed the first-stage allocations of costs to the activitycost pools, using data from last monthâs operations. The resultsappear below:
| Activity Cost Pool | ActivityMeasure | Total Cost | Total Activity | ||
| Serving a party of diners | Number ofparties served | $ | 15,680 | 5,600 | parties |
| Serving a diner | Number of dinersserved | $ | 103,320 | 12,600 | diners |
| Serving a drink | Number of drinksordered | $ | 33,000 | 11,000 | drinks |
The above costs include all of the costs of the restaurantexcept for organization-sustaining costs such as rent, propertytaxes, and top-management salaries. A group of diners who ask tosit at the same table are counted as a party. Some costs, such asthe costs of cleaning linen, are the same whether one person is ata table or the table is full. Other costs, such as washing dishes,depend on the number of diners served. |
Prior to the activity-basedcosting study, the owner knew very little about the costs of therestaurant. He knew that the total cost for the month (includingorganization-sustaining costs) was $180,000 and that 12,000 dinershad been served. Therefore, the average cost per diner was $15. |
| Required: | |
| 1. | According to the activity-based costing system, what is thetotal cost of serving each of the following parties of diners?(Round your intermediate calculations and final answers to2 decimal places. Omit the "$" sign in your response.) |
| TotalCost | ||
| a. | A party of fourdiners who order four drinks in total. | $ |
| b. | A party of threediners who do not order any drinks. | $ |
| c. | A lone diner whoorders three drinks. | $ |
| 2. | Convert the total costs you computed in (1) above to costs perdiner. In other words, what is the average cost per diner forserving each of the following parties? (Round yourintermediate calculations and final answers to 2 decimal places.Omit the "$" sign in your response.) |
| Average Cost | |||
| a. | A party of fourdiners who order four drinks in total. | $ | per diner |
| b. | A party of threediners who do not order any drinks. | $ | per diner |
| c. | A lone diner whoorders three drinks. | $ | per diner |
Related questions
Svenâs Cookhouse is a popular restaurant located on Lake Unionin Seattle. The owner of the restaurant has been trying to betterunderstand costs at the restaurant and has hired a student internto conduct an activity-based costing study. The intern, inconsultation with the owner, identified three major activities. Shethen completed the first-stage allocations of costs to the activitycost pools, using data from last monthâs operations. The resultsappear below: |
| Activity CostPool | ActivityMeasure | Total Cost | Total Activity | ||
| Serving a party ofdiners | Number of parties served | $ | 15,680 | 5,600 | parties |
| Serving a diner | Number of diners served | $ | 103,320 | 12,600 | diners |
| Serving a drink | Number of drinks ordered | $ | 33,000 | 11,000 | drinks |
The above costs include all of the costs of the restaurantexcept for organization-sustaining costs such as rent, propertytaxes, and top-management salaries. A group of diners who ask tosit at the same table are counted as a party. Some costs, such asthe costs of cleaning linen, are the same whether one person is ata table or the table is full. Other costs, such as washing dishes,depend on the number of diners served. |
Prior to the activity-basedcosting study, the owner knew very little about the costs of therestaurant. He knew that the total cost for the month (includingorganization-sustaining costs) was $180,000 and that 12,000 dinershad been served. Therefore, the average cost per diner was $15. |
| Required: | |
| 1. | According to the activity-based costing system, what is thetotal cost of serving each of the following parties of diners?(Round your intermediate calculations and final answers to2 decimal places. Omit the "$" sign in your response.) |
| TotalCost | ||
| a. | A party of four diners who orderfour drinks in total. | $ |
| b. | A party of three diners who donot order any drinks. | $ |
| c. | A lone diner who orders threedrinks. | $ |
| 2. | Convert the total costs you computed in (1) above to costs perdiner. In other words, what is the average cost per diner forserving each of the following parties? (Round yourintermediate calculations and final answers to 2 decimal places.Omit the "$" sign in your response.) |
| Average Cost | |||
| a. | A party of four diners who orderfour drinks in total. | $ | per diner |
| b. | A party of three diners who donot order any drinks. | $ | per diner |
| c. | A lone diner who orders threedrinks. | $ | per diner |
