Exercise 7-14 Calculating and Interpreting Activity-Based Costing Data [LO7-3, LO7-4] Hiram's Lakeside is a popular restaurant located on Lake Washington in Seattle. The owner of the restaurant has been trying to bett understand costs at the restaurant and has hired a student intern to conduct an activity-based costing study. The intern, in consultati with the owner, identified three major activities and then completed the first-stage allocations of costs to the activity cost pools. The results appear below. Activity Measure Cost Total Activity Serving a party of diners Serving a diner Serving drinks Number of parties served Number of diners served Number of drinks ordered 19,040 5,680 parties 114,660 12,600 diners 38,520 10,780 drinks The above costs include all of the costs of the restaurant except for organization-sustaining costs such as rent, property taxes, and top management 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 activity-based costing study, the owner knew very little about the costs of the restaurant. She knew that the total cost for the month (including organization-sustaining costs) was $180,000 and that 12,000 diners had been served. Therefore, the average cost per diner was $15 Required