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ABC Pizza currently has three types of lunch customers: Sit-down, Delivery, and Schools. The Sitdown customers are served in the restaurant, while the Delivery and
ABC Pizza currently has three types of lunch customers: Sit-down, Delivery, and Schools. The Sitdown customers are served in the restaurant, while the Delivery and School customers have their pizza delivered. A typical week has the following financial information: Required (each of these are separate situations) A. Assume that ABC does NOT use activity based costing, and instead evenly allocates all costs to each type of pizza. What is the total selling price per pizza if ABC has a mark-up of 20% (don't forget to include variable costs). B. Assume that ABC uses activity based costing, and each customer type will be charged a different price per pizza. What is the total selling price per pizza for each type of customer (Sit-down, Delivery, and Schools) if ABC has a mark-up of 20% (don't forget to include variable costs). C. Compare the results in A and B. Which customers will likely be happy/unhappy with Activity Based Costing used to determine the price per pizza? What will eventually happen if ABC is not adopted
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