Question
Hirams Lakeside is a popular restaurant located on Lake Washington in Seattle. The restaurant's owner wants to better understand his costs and hired a student
Hirams Lakeside is a popular restaurant located on Lake Washington in Seattle. The restaurant's owner wants to better understand his costs and hired a student intern to conduct an activity-based costing study. The intern identified three activities, completed the first-stage cost allocations and gathered the activity measure data shown below. Activity Cost Pool Activity Measure Total Cost Total Activity Serving a party of diners Number of parties served $ 17,160 5,200 parties Serving a diner Number of diners served $ 104,140 12,700 diners Serving drinks Number of drinks ordered $ 37,800 10,800 drinks The above costs exclude organization-sustaining costs such as rent, property taxes, and top-management salaries. Some costs, such as the cost of cleaning the Prior to the activity-based costing study, the owner knew very little about the restaurant costs. She only knew the total cost for the month (including organization-sustaining costs) was $180,000 and 12,000 diners had been served. Therefore, the average cost per diner was $15.
Required:
1 and 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?
Note: 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.
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