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Hiram's Lakeside is a popular restaurant located on Lake Washington in Seattle. The owner of the restaurant has been trying to better understand costs at
Hiram's Lakeside is a popular restaurant located on Lake Washington in Seattle. The owner of the restaurant has been trying to better understand costs at the restaurant and has hired a student intern to conduct an activitybased 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.
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 include all of the costs of the restaurant except for 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 costs of the restaurant. She knew that the total cost for the month including organizationsustaining costs was $ and that diners had been served. Therefore, the average cost per diner was $
Required:
& 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? 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,Average CostaA party of five diners who order five drinks in total,,,per dinerbA party of four diners who do not order any drinks,,,per dinercA party of one diner who orders three drinks,,,per diner
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