Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Onassis Catering is a Greek company that provides passenger and crew meals to airlines operating out of two international airports in Athens and Corfu. The

image text in transcribed
image text in transcribed
image text in transcribed
Onassis Catering is a Greek company that provides passenger and crew meals to airlines operating out of two international airports in Athens and Corfu. The operations at the two airports are managed separately, and top management believes that there may be benefits to greater sharing of information between the two operations. To better compare the two operations, an ABC system has been designed with the active participation of the managers at both airports. The ABC system is based on the following activity cost pools and activity measures: Activity Cost Pool Meal preparation Flight-related activities Customer service Other (costs of idle capacity and organization-sustaining costs) Activity Measure Number of meals Number of flights Number of customers NA The operation at Athens International Airport (AIA) serves 1 million meals annually on 5,000 flights for 10 different airlines. (Each airline is considered one customer.) The annual cost of running the AIA airport operation, excluding only the costs of raw materials for meals, totals 3,779,950. Note: The currency in Greece is the euro, denoted by . Annual Cost of the AIA Operation Cooks and delivery personnel wages Kitchen supplies Chef salaries Equipment depreciation Administrative wages and salaries Building costs 3,060,000 40,450 234,000 81,000 202,500 162,000 Total cost 3,779,950 To help determine the activity rates, employees were interviewed and asked how they divided their time among the four major activities. The results of employee interviews at AIA are displayed below: To help determine the activity rates, employees were interviewed and asked how they divided their time among the four major activities. The results of employee interviews at AIA are displayed below: Distribution of Resource Consumption across Activities at the AIA Operation Cooks and delivery personnel wages Kitchen supplies Chef salaries Equipment depreciation Administrative wages and salaries Building costs Meal Flight- Customer Preparation Related Service 75% 20% 04 100% 0% 0% 35% 20% 404 65% % 0% 25% 509 eu 04 04 Other 54 84 54 35% 259 100% Total 1004 100% 100% 100% 100% 1004 Required: 1. Perform the first-stage allocation of costs to the activity cost pools. (Do not leave any empty spaces; input a O wherever it is required.) Meal Flight Customer Service Other Totals Related Preparation Cooks and delivery personnel wages Kitchen supplies Chef salaries Equipment depreciation Administrative wages and salaries Building costs Total cost 2. Compute the activity rates for the activity cost pools. (Round your activity rates for meal preparation to 4 decimal places and flight-related to 2 decimal places. Do not leave any empty spaces; input a 0 wherever it is required.) Meal Customer Flight-Related 5,000 flights Service 10 airlines Activity at AIA Preparation 1.000,000 meals Cooks and delivery personnel wages Kitchen supplies Chef salaries Equipment depreciation Administrative wages and salaries Building costs Total cost

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

Intermediate Accounting

Authors: Loren A. Nikolai, John D. Bazley, Jefferson P. Jones

11th edition

978-0538467087, 9781111781262, 538467088, 1111781265, 978-0324659139

More Books

Students also viewed these Accounting questions

Question

D-1 Outline the six steps for controlling your assets.

Answered: 1 week ago

Question

Ensure continued excellence in people management.

Answered: 1 week ago

Question

Enhance the international team by recruiting the best people.

Answered: 1 week ago