Cathy, the manager of Cathy's Catering, Inc., uses activity-based costing to compute the costs of her...
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Cathy, the manager of Cathy's 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) Advertising (parties) Planning (parties) Renting equipment (parties, guests) Obtaining insurance (parties) Serving (parties, servers) Preparing food (guests) Afternoon Picnic $ 83 per party $100 per party $ 47 per party plus $14 per guest $195 per party $ 43 per server per party $ 15 per guest Formal Dinner $ 83 per party $ 140 per party $ 80 per party plus $25 per guest $ 385 per party $ 82 per server per party $ 32 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? Complete this question by entering your answers in the tabs below. Required A Required B Required C Compute the cost of a 20-guest afternoon picnic. Afternoon picnic < Required A Required B > Cathy, the manager of Cathy's 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) Advertising (parties) Planning (parties) Renting equipment (parties, guests) Obtaining insurance (parties) Serving (parties, servers) Preparing food (guests) Afternoon Picnic $ 83 per party $100 per party $ 47 per party plus $14 per guest $195 per party $ 43 per server per party $ 15 per guest Formal Dinner $ 83 per party $ 140 per party $ 80 per party plus $25 per guest $ 385 per party $ 82 per server per party $ 32 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? Complete this question by entering your answers in the tabs below. Required A Required B Required C Compute the cost of a 20-guest afternoon picnic. Afternoon picnic < Required A Required B >
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