Question
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 3,743,300. Note : The currency in Greece is the euro, denoted by . Annual Cost of the AIA Operation Cooks and delivery personnel wages 3,040,000 Kitchen supplies 37,800 Chef salaries 231,000 Equipment depreciation 79,000 Administrative wages and salaries 197,500 Building costs 158,000 Total cost 3,743,300 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.) 3. Not available in Connect.
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