Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Jane's Cookhouse is a popular restaurant located in a scenic setting. The owner of the restaurant has been trying to better understand costs at the

image text in transcribedimage text in transcribedimage text in transcribed
Jane's Cookhouse is a popular restaurant located in a scenic setting. The owner of the restaurant has been trying to better understand costs at the restaurant and has hired a student intern to conduct an ABC study. The intern, in consultation with the owner, identified three major activities. The intern then completed the first-stage allocations of costs to the activity cost pools, using data from last month's operations. The results appear below: Activity Cost Pool Activity Measure Total Cost Total Activity Serving a party of diners Number of parties served $ 26, 400 6,000 parties Serving a diner Number of diners served $142, 500 15,000 diners Serving a drink Number of drinks ordered $ 55, 200 12,000 drinks 20 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. A group of diners who ask to sit at the same table are counted as a party. Some costs, such as the costs of cleaning linen, are the same whether one person is at a table or the table is full. Other costs, such as washing dishes, depend on the number of diners served. Prior to the ABC 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 $300,000 and that 15,000 diners had been served. Therefore, the average cost per diner A was $20. Required: 1. According to the ABC system, what is the total cost of serving each of the following parties of diners? a. A party of four diners that orders three drinks in total. (Round your answers to 2 decimal places.) Activity Cost Pool ABC Cost Serving parties Serving diners Serving drinks itv AUG 3 MacBook Pro21 b. A party of two diners that does not order any drinks. (Round your answers to 2 decimal places. Do not leave any empty spaces; input a 0 wherever it is required.) Activity Cost Pool ABC Cost Serving parties Serving diners 02:52:07 Serving drinks Total c. A lone diner who orders two drinks. (Round your answers to 2 decimal places.) Activity Cost Pool ABC Cost Serving parties Serving diners Serving drinks Total AUG 2 tv O 3 MacBook Pro

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Internet Supply Chain Impact On Accounting And Logistics

Authors: D. Chorafas

5th Edition

0333949633, 9780333949634

More Books

Students also viewed these Accounting questions

Question

What internal and external forces were influencing DigiTech?

Answered: 1 week ago