Hiram's Lakeside is a popular restaurant located on Lake Washington in Seattle. 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 three major activities and then completed the first stage allocations of costs to the activity cost pools. The results appear below. Activity Cost Pool Serving a party of diners Serving a diner Serving drinks Total Activity Measure Cost Total Activity Number of parties $ 14.850 5,500 parties served Number of diners served $ 108,900 12,100 diners Number of drinks $ 29,580 10,200 drinks ordered The above costs include all of the costs of the restaurant except for organization-sustaining costs such as rent, property taxes, and top-management salaries. Some costs, such as the cost of cleaning the linens that cover the restaurant's tables, vary with the number of parties served. Other costs, such as washing plates and glasses, depend on the number of diners served or the number of drinks served. 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 (including organization-sustaining costs) was $180.000 and that 12.000 diners had been served. Therefore, the average cost per diner was $15. Required: 1&2. According to the activity-based costing system, what is the total cost and average cost per diner for serving each of the following parties of diners? (Round your Intermediate calculations to 2 decimal places. Round your Total Cost final answers to 2 decimal places and your Average Cost final answers to 3 decimal places.) a. A party of three diners who order five drinks in total. b. A party of two diners who do not order any drinks. c. A party of one diner who orders four drinks. Total Cost S 56.40 38.70 Is 14.60 $ $ $ Average Cost 282.000 per diner 9.675 per diner 14.600 per diner Foam Products, Inc., makes foam seat cushions for the automotive and aerospace industries. The company's activity-based costing system has four activity cost pools, which are listed below along with their activity measures and activity rates: Activity Cost Pool Supporting direct labor Batch processing Order processing Customer service Activity Measure Number of direct labor-hours Number of batches Number of orders Number of customers Activity Rate $ 8 per direct labor-hour $ 98 per batch $ 272 per order $ 2,632 per customer The company just completed a single order from Interstate Trucking for 2.100 custom seat cushions. The order was produced in two batches. Each seat cushion required 0.5 direct labor-hours. The selling price was $141.40 per unit, the direct materials cost was $103 per unit, and the direct labor cost was $14.00 per unit. This was Interstate Trucking's only order during the year. Required: Calculate the customer margin on sales to Interstate Trucking for the year. Answer is complete but not entirely correct. Interstate Trucking Customer Margin-ABC Analysis Sales $ 296,940 Costs: Direct materials Direct labor Supporting direct labor Batch processing Order processing Customer service overhead $ 216.300 20.400 8.400 392 272 2.632 257,396 39,544 Customer margin $
