Question
Cathy, the manager of Cathys Catering, Inc., uses activity-based costing to compute the costs of her catered parties. Each party is limited to 20 guests
Cathy, the manager of Cathys Catering, Inc., uses activity-based costing to compute the costs of her catered parties. Each party is limited to 20 guests and requires 4 people to serve and clean up. Cathy offers two types of parties, an afternoon picnic and an evening formal dinner. The breakdown of the costs follows:
| Activities (and cost drivers) | Afternoon Picnic | Formal Dinner | ||||
| Advertising (parties) | $ | 115 | per party | $ | 115 | per party |
| Planning (parties) | $ | 96 | per party | $ | 138 | per party |
| Renting equipment | $ | 52 | per party plus | $ | 81 | per party plus |
| (parties, guests) | $ | 13 | per guest | $ | 23 | per guest |
| Obtaining insurance (parties) | $ | 160 | per party | $ | 400 | per party |
| Serving (parties, servers) | $ | 50 | per server per party | $ | 76 | per server per party |
| Preparing food (guests) | $ | 16 | per guest | $ | 35 | per guest |
Required:
a. Compute the cost of a 20 guest afternoon picnic.
b. Compute the cost of a 20 guest evening formal dinner.
c. How much should Cathy charge for each guest for each type of party if she wants to cover her costs? (Round your answers to 2 decimal places.)
Additional question pertaining to the question:
How is the "party plus" number found?
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Banking Audit Study On Effectiveness And Efficiency Of Public And Private Sector Banks In GVMC Of Andhra Pradesh State
Authors: Tarakeswara Rao Sivvala
1st Edition
6202917571, 978-6202917575
