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Jordan's Lakeside is a popular restaurant located on Lake Muskoka in Ontario. The owner of the restaurant has been trying to better understand costs
Jordan's Lakeside is a popular restaurant located on Lake Muskoka in Ontario. 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 the following major activities: Activity Cost Pool Serving a party of diners 6 Serving a diner Serving drinks Activity Measure Number of parties served Number of diners served Number of drinks ordered One or more diners who ask to sit at a 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. Data concerning these activities are displayed below. Total cost Total activity Serving a Party $22,100 Serving a Diner $57,350 4,250 parties 9,250 diners Serving Drinks $14,500 7,250 drinks Total $93,950 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 was $93,950 and that 9,250 diners had been served. Therefore, the average cost per diner was approximately $10.16 (= $93,950 +9,250 diners) Required: 1. Compute the activity rate for each of the three activities. (Round your answers to 2 decimal places.) Serving a Party Serving a Diner Serving Drinks Cost per unit of activity 2. According to the ABC system, what is the total cost of serving each of the following parties of diners? (Do not round intermediate calculations. Round your answers to 2 decimal places.) a A party of four diners who order three drinks in total b A party of two diners who do not order any drinks CA party of one diner who orders two drinks Total Cost 3. Convert the total costs you computed in part (2) to costs per diner. In other words, what is the average cost per diner for serving each of the following parties of diners? (Do not round intermediate calculations. Round your answers to 2 decimal places.) a A party of four diners who order three drinks in total b. A party of two diners who do not order any drinks cA party of one diner who orders two drinks Average Cost por diner per diner per diner
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