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7 . Richard's Events provides catering services, among other services. The company has adopted actlvity - based costing ( ABC ) for the catering services.

7. Richard's Events provides catering services, among other services. The company has adopted actlvity-based costing (ABC) for the catering services. The ABC system classifies activities into two groups based on the cost driver used: Diners and Events. Each event is IImited to 25 guests and requires four people to serve and clean up. Richard's Events offers two types of catered events-an informal, outside party and a formal, seated meal.
The cost accountant at Richard's Events has developed the following cost-driver rates for the Individual activitles:
Per-event costs do not vary with the number of diners.
Required:
a. Compute the cost of a 25-guest informal party.
b. Compute the cost of a 25-guest formal meal.
c. How much should Richard's Events charge for each diner for each type of event if the company is to cover its costs?
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