Problem 4-14 (Algo) Compute and Use Activity Rates to Determine the Costs of Serving Customers [LO4-2, LO4-3, LO4-4] Gino's Restaurant is a popular restaurant in Boston, Massachusetts. The owner of the restaurant has been trying to better understand costs at the restaurant and has hired a student intern to conduct an activity-based costing study. The intern, in consultation with the owner, identified the following major activities: A Activity Cost Pool Serving a party of diners Serving a diner Serving drinks Activity Measure Number of parties served Number of diners served Number of drinks ordered drinks group of diners who ask to sit at the same table is 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 shown below. Total cost Total activity Serving a Party $ 52,800 Serving a Diner $ 240,000 8,000 parties 40,000 diners Serving Drinks $ 67,200 56,000 drinks Total $360,000 Prior to the activity-based costing study, the owner knew very little about the costs of the restaurant. She knew that the total cost for the month was $360,000 and that 40,000 diners had been served. Therefore, the average cost per diner was $9.00 ($360,000- 40,000 diners $9.00 per diner).