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Exercise 7 - 1 4 ( Algo ) Calculating and Interpreting Activity - Based Costing Data [ LO 7 - 3 , LO 7 -
Exercise Algo Calculating and Interpreting ActivityBased Costing Data LO LO
Hiram's Lakeside is a popular restaurant located on Lake Washington in Seattle. The restaurant's owner wants to better understand his costs and hired a student intern to conduct an activitybased costing study. The intern identified three activities, completed the firststage cost allocations and gathered the activity measure data shown below.
tableActivity Cost Pool,Activity Measure,Total Cost,Total ActivityServing a party of diners,Number of parties served,$ partiesServing a diner,Number of diners served,$ dinersServing drinks,Number of drinks ordered,$ drinks
The above costs exclude organizationsustaining costs such as rent, property taxes, and topmanagement salaries.
Some costs, such as the cost of cleaning the linens that cover the restaurant's tables, vary with the number of parties served. Other costs, such as washing plates and glasses, depend on the number of diners served or the number of drinks served.
Prior to the activitybased costing study, the owner knew very little about the restaurant costs. She only knew the total cost for the month including organizationsustaining costs was $ and diners had been served. Therefore, the average cost per diner was $
Required:
and According to the activitybased costing system, what is the total cost and average cost per diner for serving each of the following parties of diners?
Note: Round your intermediate calculations to decimal places. Round your Total Cost final answers to decimal places and your Average Cost final answers to decimal places.
tableTotal Cost,go Costa A party of four diners who order three drinks in total.,,per dinerb A party of four diners who do not order any drinks.,,per dinerc A party of one diner who orders three drinks.,,per diner
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