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Gino's Restaurant is a popular restaurant in Boston, Massachusetts. The owner of the restaurant has been trying to better understand costs at the restaurant and
Gino's 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 Serving a party of diners Serving a diner Serving drinks Activity Measure Number of parties served Number of diners served Number of drinks ordered A group of diners who ask to sit at the same table is counted as a party. Some costs, such as the costs of cleaning linen, are the same whether one person is at a table or the table is full. Other costs, such as washing dishes, depend on the number of diners served Data concerning these activities are shown below Serving a Party $65,700 Total $223,700 Serving a Dinner Serving Drinks $81,000 Total cost Total activity $77,000 9,000 parties 10,000 diners45,000 drinks Prior to the activity-based costing study, the owner knewvery 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). Required: 1. Compute the activity rates for each of the three activities. (Round your answers to 2 decimal places.) Serving a Party Serving a Diner Serving Drinks Cost per unit of activ per party per diner per drink
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