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 partiesan afternoon picnic and an evening formal dinner. The breakdown of the costs follows.
| Activities (and cost drivers) | Afternoon Picnic | Formal Dinner | ||||
| Advertising (parties) | $ | 103 | per party | $ | 103 | per party |
| Planning (parties) | $ | 78 | per party | $ | 118 | per party |
| Renting equipment (parties, guests) | $ | 57 | per party plus $11 per guest | $ | 66 | per party plus $20 per guest |
| Obtaining insurance (parties) | $ | 155 | per party | $ | 425 | per party |
| Serving (parties, servers) | $ | 50 | per server per party | $ | 78 | per server per party |
| Preparing food (guests) | $ | 15 | per guest | $ | 26 | per guest |
Per party costs do not vary with the number of guests.
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?
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Financial Audit American Battle Monuments Commissions Financial Statements For Fiscal Years 2011 And 2010
Authors: Government Accountability Office
1st Edition
1492310883, 978-1492310884
