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 2015 Table 1) into major cost pools following the model below (Figure 1). Please note that the payroll for the FOH was $12,5206 and the payroll for the BOH was $17,671.94 for April, 2015.