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 Activity Measure Meal preparation Number of meals Flight related activities Number of flights Customer service Number of customers Other (costs of idle capacity and organization sustaining costs) 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 3,916,550 Note The currency in Greece is the euro, denoted by Annual Cost of the AIA Operation Cooks and delivery personnel wages 3,140,000 Kitchen supplies 41,050 Chef salaries 246,000 Equipment depreciation 89,000 Administrative wages and salaries 222,500 Building costs 178,000 Total cost 3,916,550 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 Meal Preparation Flight Related Customer Service Other Total Cooks and delivery personnel wages 75 20 0 5 100 Kitchen supplies 100 0 0 0 100 Chef salaries 35 20 40 5 100 Equipment depreciation 65 0 0 35 100 Administrative wages and salaries 0 25 50 25 100 Building costs 0 0 0 100 100 Required 1 Perform the first stage allocation of costs to the activity cost pools (Do not leave any empty spaces input a 0 wherever it is required ) 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 )

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Jul 16, 2024

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

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	Activity Measure
Meal preparation	Number of meals
Flight-related activities	Number of flights
Customer service	Number of customers
Other (costs of idle capacity and organization-sustaining costs)	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 3,916,550. Note : The currency in Greece is the euro, denoted by .

Annual Cost of the AIA Operation
Cooks and delivery personnel wages		3,140,000
Kitchen supplies		41,050
Chef salaries		246,000
Equipment depreciation		89,000
Administrative wages and salaries		222,500
Building costs		178,000

Total cost		3,916,550

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

	Meal Preparation			Flight- Related			Customer Service			Other			Total
Cooks and delivery personnel wages		75	%		20	%		0	%		5	%		100	%
Kitchen supplies		100	%		0	%		0	%		0	%		100	%
Chef salaries		35	%		20	%		40	%		5	%		100	%
Equipment depreciation		65	%		0	%		0	%		35	%		100	%
Administrative wages and salaries		0	%		25	%		50	%		25	%		100	%
Building costs		0	%		0	%		0	%		100	%		100	%

Required:

1. Perform the first-stage allocation of costs to the activity cost pools. (Do not leave any empty spaces; input a 0 wherever it is required.)

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.)