Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Lifsey Wedding Fantasy Company makes very elaborate wedding cakes to order. The owner of the company has provided the following data concerning the activity rates
Lifsey Wedding Fantasy Company makes very elaborate wedding cakes to order. The owner of the company has provided the following data concerning the activity rates in its activity-based costing system: Activity Cost Pools Activity Rate Size- related $0.94 per guest Complexity- related $ 31.62 per tier Order-related $ 55.79 per order The measure of activity for the size-related activity cost pool is the number of planned guests at the wedding reception. The greater the number of guests, the larger the cake. The measure of complexity is the number of tiers in the cake. The activity measure for the order-related cost pool is the number of orders. (Each wedding involves one order). The activity rates include the costs of raw ingredients such as a flour, miniature statues and wedding bells, which are accounted for separately. Data concerning two recent orders below: Pyburn wedding Smith wedding Number of reception guests 72 189 Number of tiers on the cake 4 5 Cost of purchased decorations for cake $29.92 $62.75 Assuming that all of the costs listed below are avoidable costs in the event that an order in turned down. What amount would the company have to charge for the pyburn wedding cake to just break even? a) $279.87 b) $55.79 c) $29.92 d) $338.64
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started