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 activity-based costing study. The intern, in consultation 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 Cost Pool Serving a party of diners Serving a diner Serving drinks Total Activity Measure Cost Total Activity Number of parties $ 17,850 5,100 parties served Number of diners served $ 119,600 13,000 diners Number of drinks $ 37,370 10,100 drinks ordered 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 th 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: 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 final answers to 3 decimal places.) Total Cost a. A party of six diners who order four drinks in total b. A party of three diners who do not order any drinks. c. A party of one diner who orders three drinks. Average Cost per diner per diner per diner ! Required Information [The following information applies to the questions displayed below.) Raner. Harris & Chan is a consulting firm that specializes in information systems for medical and dental clinics. The firm has two offices-one in Chicago and one in Minneapolis. The firm classifies the direct costs of consulting jobs as variable costs. A contribution format segmented income statement for the company's most recent year is given: Office Total Company Chicago Minneapolis Sales $482,000 100% $166,000 100% $316,000 100% Variable expenses 239,400 50% 49,800 30% 189,600 60% Contribution margin 242,600 50% 116,200 70% 126,400 40% Traceable fixed expenses 136,880 28% 86, 320 52% 50,560 16% Office segment margin 105,720 22% $ 29,880 18% $ 75, 840 24% Common fixed expenses not traceable to offices 67,480 14% Net operating income $ 38,240 8% 3. Assume that sales in Chicago increase by $58.000 next year and that sales in Minneapolis remain unchanged. Assume no change in fixed costs. a. Prepare a new segmented income statement for the company. (Round your intermediate calculations and percentage answers to 1 decimal place (I.e. 0.1234 should be entered as 12.3 and other answers to the nearest whole dollar.)) Segments Chicago Minneapolis Total Company Amount % Amount % Amount % 0 0.0 0 0.0 0 0.0 0 0.00 $ 0 0.0 S 0 0.0 $ 0 0.0
