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Hiram's Lakeside is a popular restaurant located on Lake Washington in Seattle. The owner ofthe restaurant has been trying to better understand costs at the
Hiram's Lakeside is a popular restaurant located on Lake Washington in Seattle. The owner ofthe 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 three major activities and then completed the firststage allocations of costs to the activity cost pools. The results appear below. Activity Cost Pool Activity Measure Total Cost Total Activity Serving a party of diners Number of parties served $ 15,966 5,?00 parties Serving a diner Number of diners served $ 99,636 12,306 diners Serving drinks Number of drinks ordered $ 36,606 16,206 drinks The above costs include all ofthe costs of the restaurant except for organizationsustaining 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 ofdiners served or the number of drinks served. Prior to the activitybased costing study, the owner knew very little about the costs of the restaurant. She knew that the total cost for the month (including organizationsustaining costs) was $180,000 and that 12,000 diners had been served. Therefore, the average cost per diner was $15. Required: 1&2. According to the activity-based costing system, what is the total cost and average cost per diner for serving each of the following parties of diners? {Round your intermediate calculations to 2 decimal places. Round your Total Cost final answers to 2 decimal places and your Average Cost nal answers to 3 decimal places} a. A partyr of three diners who order four drinks in total. _ _ _ b. A part1,r of five diners who do not order any drinks. c. Aparty ofone diner who orders two drinks
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