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 Activity Measure Total Cost Total Activity Serving a party of diners Number of parties served $ 33,000 6,000 parties Serving a diner Number of diners served $ 138,000 15,000 diners Serving drinks Number of drinks ordered $24.000 10.000 drinks 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 the restaurant. She knew that the total cost for the month (including organization-sustaining costs) was $240,000 and that 15,000 diners had been served. Therefore, the average cost per diner was $16. Required: 182. 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 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 Average Cost per diner per diner per diner . Worley Company buys surgical supplies from a variety of manufacturers and then resells and delivers these supplies to hundreds of hospitals. Worley sets its prices for all hospitals by marking up its cost of goods sold to those hospitals by 5%. For example, if a hospital buys supplies from Worley that cost Worley $100 to buy from manufacturers, Worley would charge the hospital $105 to purchase these supplies. For years, Worley believed that the 5% markup covered its selling and administrative expenses and provided a reasonable profit. However, in the face of declining profits, Worley decided to implement on activity based costing system to help improve its understanding of customer profitability. The company broke its selling and administrative expenses into five activities as shown: Activity cont Pool Activity Measure) Total Cont Total Activity Customer deliveries (Number of deliveries) $ 500,000 5,000 deliveries Manual order processing Number of manual orders) 248,000 4.000 orders Electronic order processing (Number of electronic ordero) 200,000 12,500 orders Lise item picking (Number of line items picked) 450,000 450.000 line item Other organisation-sustaining costs (None) Total selling and administrative expenses $2,000,000 602,000 Worley gathered the data below for two of the many hospitals that it serves-University and Memorial (each hospital purchased medical supplies that had cost Worley $30,000 to buy from manufacturers): Activity Activity Measure University Memoria Number of deliveries 10 Number of manual orders 30 Number of electronie orders 15 Number of line items picked 250 25 0 0 120 Required: 1. Compute the total revenue that Worley would receive from University and Memorial 2. Compute the activity rate for each activity cost pool. 3. Compute the total activity costs that would be assigned to University and Memorial. 4. Compute Worley's customer margin for University and Memorial (Hint: Do not overlook the $30,000 cost of goods sold that Worley
