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Ginos Restaurant is a popular restaurant in Boston, Massachusetts. The owner of the restaurant has been trying to better understand costs at the restaurant and

Ginos Restaurant is a popular restaurant in Boston, Massachusetts. The owner of the restaurant has been trying to better understand costs at the restaurant and has hired a student intern to conduct an activity-based costing study. The intern, in consultation with the owner, identified the following major activities:

Activity Cost Pool Activity Measure
Serving a party of diners Number of parties served
Serving a diner Number of diners served
Serving drinks Number of drinks ordered

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, depends on the number of diners served or the number of drinks served.

Data concerning these activities are shown below.

Serving a Party Serving a Dinner Serving Drinks Total
Total cost $65,700 $77,000 $81,000 $223,700
Total activity 9,000 parties 10,000 diners 45,000 drinks

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 was $223,700 and that 10,000 diners had been served. Therefore, the average cost per diner was $22.37 ($223,700 10,000 diners = $22.37 per diner).

2.

According to the activity-based costing system, what is the total cost of serving each of the following parties of diners? (Do not round intermediate calculations. Round your final answers to 2 decimal places.)
a. A party of four diners who order three drinks in total.
b. A party of two diners who do not order any drinks.
c. A party of one diner who orders two drinks.
Total
Party of four diners who order three drinks
Party of two diners who order no drinks
Party of one diner who orders two drinks

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