The application of Activity-Based Costing in a Casual Service Restaurant. The restaurant is a franchise located in the southwestern USA. It is a casual service restaurant and has about 50 seats. The study will calculate Activity-Based Costs for major items from the restaurant menu as selected by management. Students should incorporate the following steps: ABC Stage One 1. Decompose the general ledger (use the provided income statements for April 2020 (Table 1) into major cost pools following the model below (Figure 1). Please note that the payroll for the FOH was $12,521.06 and the payroll for the BOH was $17,671.94 for April, 2021. Figure 1 ABC Model for Restaurants (used in this case study) General Ledger Personne Facility Sustaining First Stage BOH Activity Center FOH Activity Center Unit-Level Unit-Level Batch-Level Batch-Level Product-Sustaining Product-Sustaining Second Stage Dinner Entrees Unit-Level . Batch-Level Product-Sustaining Facility-Sustaining Food CostApril 2021 Total Revenue $ 91,460 CGS - Food 31,405 CGS - Beverage 1,220 Supplies 2,500 Accounting 250 Transportation 186 Security 33 Bank charges 49 Entertainment 335 Insurance 312 License fees 500 Telephone 143 Linen & Laundry 677 Office supplies 408 Payroll costs 30,193 Utilities 7,000 Rent and Maintenance 6,000 Q1 + 2: Labor Facility-Sustaining FOH $12,521.06 BOH $17,671.94 $ 30,193.00 18,393Table 2 MENU ITEM # MENU ITEM NAME SOLD MIX % FOOD ITEM (MM) (MM%) COST PRICE Chopped Salad 229 5.88% 2.24 8.95 Chopped Salad w Chicken 200 5.13% 3.12 11.70 Chopped Salad w Tuna 29 0.74% 3.12 11.70 Arugula Pear Salad 100 2.57% 2.24 8.75 Arugula w Chicken 150 3.85% 3.12 11.50 Arugula w Tuna 56 1.44% 3.12 11.50 Cobb Salad 589 15.12% 2.69 10.75 300 Chicken Caesar Wrap 7.70% 3.18 9.95 259 BBQ Chicken Wrap 6.65% 3.18 9.95 Chicken Tender Wrap 123 3.16% 3.08 9.95 269 Cheeseburger 6.90% 1.75 7.95 Chicken Mushroom Burger 96 2.46% 2.69 9.95 Grilled Garden Burger 202 5.18% 2.07 7.95 Smoked Turkey & Avocado 521 13.37% 2.93 9.75 440 Sandwich 310 7.96% 3.36 10.50 Turkey Club 163 4.18% 2.85 10.95 Signature Pasta 105 2.70% 2.99 11.50 Angel Hair Bolognese 63 1.62% 2.85 10.95 Traditional Tomato Basil 67 1.72% 2.54 9.75 Mac & Cheese 65 1.67% 2.47 9.95 Total 3896 100.0%2. Display overhead costs pools in a table. 3. Establish cost pool rates and an allocation value using the following information: a) The total # of items sold during April 2021 = 3,896 b) For the selected menu items the employees worked 800 hours in the FOH, and 1,000 hours in the BOH during April, 2021. Q3 a and b: Labor cost pool rates FOH: 12,521.06f800= $15.65 per hour 15.65/60 = $0.26 per minute BOH: l7,6717'l,000=$17.67 per hour 17.67/60 = $0.29 per minute Allocation: 18,393/3,896 = $4.72 4. Conduct a contribution margin menu engineering (CM ME) analysis by using the data displayed in Table 2. ABC Stage Two S.Trace overhead costs from the activity cost pools to the \"Garden Burger,\" \" Chicken Caesar Wrap,\" and \" Cobb Salad\" items, and construct \"bills of activities\" for these items (resource consumptions for the items are displayed in Tables 3, 4 & 5). 6.Calculate the ABC costs for all 3 items and conduct an ABC menu engineering analysis by using the data from table 6., and the data determined for the \"Garden Burger,\" \" Chicken Caesar Wrap,\" and \" Cobb salad\" items. 7. Compare the results from the CM and ABC analyses and make management recommendations according to the ABC ME analysis. Q5 and 6: Table 3 Bill of Activity for Garden Burger Activities Resources Cost Pool Rates $ Total Use /Minute Cost $ Unit-Level Activities FOH minutes Communicating Setting-Up Serving Customers Processing Checks Total 1.16 *0.26 0.30 BOH Preparation Cooking Cleaning Total 1 *0.29 0.29 Total Unit-Level Activities 2.16 0.59 Batch-Level Activities FOH Setting-Up Cleaning Administrating *0.26 0.26 Tota *0.26 0.26 BOH Preparation Cleaning #0.29 0.29 Total *0.29 0.29 Total Batch-Level Activities 0.55 Product-Sustaining Activities FOH Administrating BOH Administrating 1.09 *0.29 0.32 Total Product-Sustaining 1.09 0.32 Activities Facility-Sustaining Activities 1 unit 3.69 Food Cost 1 unit 2.07 Total Cost 7.22 0Table 4. Bill of Activity for Cobb Salad Activities Resources Cost Pool Rates $ Total Used Minute Cost $ Unit-Level Activities FOH minutes Communicating Setting-Up Serving Customers Processing Checks Total 1.16 *0.26 0.30 BOH Preparation 1.46 *0.29 0.42 Cooking Cleaning Total Total Unit-Level Activities 2.62 0.76 Batch-Level Activities FOH Setting-Up Cleaning Administrating *0.26 0.26 Total *0.26 0.26 BOH Preparation 1 *0.29 0.29 Cleaning Total *0.29 0.29 Total Batch-Level Activities 0.55 Product-Sustaining Activities FOH Administrating BOH Administrating 1.09 *0.29 0.32 Total Product-Sustaining 1.09 0.32 Activities Facility-Sustaining Activities 1 unit Food Costs 1 unit 2.69 Total CostTable 5 Bill of Activity for Chicken Caesar Wrap Activities Resources Cost Pool Rates $ Total Use Minute Cost $ Unit-Level Activities FOH minutes Communicating Setting-Up Serving Customers Processing Checks Total 1.16 *0.26 0.30 BOH Preparation 1 *0.29 0.29 Cooking Cleaning Total Total Unit-Level Activities 2.16 0.63 Batch-Level Activities FOH Setting-Up Cleaning Administrating *0.26 0.26 Total *0.26 0.26 BOH Preparation 1.4 *0.29 Cleaning 0.41 Total 1.4 *0.29 0.41 Total Batch-Level Activities 2.4 0.70 Product-Sustaining Activities FOH Administrating BOH Administrating 1.09 *0.29 0.32 Total Product-Sustaining 1.09 0.32 Activities Facility-Sustaining Activities 1 unit Food Costs 1 unit 3.18 Total CostTable 6 # MENU ITEM MENU ITEM SOLD MIX % ITEM NAME ABC (MM%) PRICE (MM) COST Chopped Salad 229 5.88% 7.63 8.95 Chopped Salad w Chicken 200 5.13% 3.75 11.70 Chopped Salad w Tuna 29 0.74% 8.75 11.70 Arugula Pear Salad 100 2.57% 7.64 3.75 Arugula w Chicken 150 3.85% 8.38 11.50 Arugula w Tuna 56 1.44% 8.38 11.50 Cobb Salad 589 15.12% 7.97 10.75 300 7.70% 8.44 9.95 Chicken Caesar Wrap 259 6.65% 8.24 9.95 BBQ Chicken Wrap 8 9.95 Chicken Tender Wrap 123 3.16% 269 6.90% 7.08 Cheeseburger 7.95 Chicken Mushroom Burger 96 2.46% 3.10 9.95 Grilled Garden Burger 202 5.18% 7.22 7.95 Smoked Turkey & Avocado 521 13.37% 8.49 9.75 440 Sandwich 310 7.96% 8.86 10.50 Turkey Club 163 4.18% 8.45 10.95 Signature Pasta 105 2.70% 8.93 11.50 Angel Hair Bolognese 53 1.62% 8.79 10.95 Traditional Tomato Basil 57 1.72% 8.23 9.75 Mac & Cheese 65 1.67% 7.97 9.95 Total 3896 100.0%