Question

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: Serving a Party $33,600 6,000 parties Total cost Total activity Serving a Diner $168,000 30,000 diners Serving Drinks $88,500 59,000 drinks Total $ 290,100 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 $290,100 and that 30,000 diners had been served. Therefore, the average cost per diner was $9.67 ($290,100 = 30,000 diners = $9.67 per diner). Required:

Answer 1

59000 1 Calculation of cost per unit of Activity slaving a pesty. 533600 - $ 5.60 per Party 6000 Serving a dimex - 168000-$ 5,60 per dimenu 30000 Sexxing drinks 88500 - $1050 per dimeck dienkou 2. Calculation A total cost 1a A Party of four dimer who order three drinks y (14 35.60 per Parks] + [4 dimer x 85-60 per dimer) + [3deintus * $50 per deinces? 5.60+ 22.40 + 4.50 32.50 16 A Party of two dimer 1 party xº$5.60] + adimer x 85-60 c) A lome dimer who orders two drinks o I nte* (1 dimer x $ 560 HQdainus x $1.50) $8.60 - Tokel (os+, 830 dimus 3. a) Average cost No of dimer og - $ 8-13 0 $8:13 8 .40 pes dimer b) Average cost : $16.80 2 4 Average (ost $8.50, 88-60_per dines

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