- wy w way maNudhuldeturing Environment (LU 9-4,5) Cathy, the manager of Cathy's Catering, Inc., uses activity-based costing to compute the costs of her catered parties. Each party is limited to 20 guests and requires 4 people to serve and clean up. Cathy offers two types of parties-an afternoon picnic and an evening formal dinner. The breakdown of the costs follows. Activities and cost drivers) Afternoon Picnic Advertising (parties) $111 per party Planning (parties) $ 66 per party Renting equipment (parties, guests) $ 57 per party plus $13 per guest Obtaining insurance (parties) $170 per party Serving (parties, servers) $ 52 per server per party Preparing food (guests) $ 25 per guest Formal Dinner $111 per party $148 per party $ 70 per party plus $21 per guest $390 per party $ 76 per server per party $ 33 per guest Per party costs do not vary with the number of guests. Required: a. Compute the cost of a 20-guest afternoon picnic b. Compute the cost of a 20-guest evening formal dinner c. How much should Cathy charge for each guest for each type of party if she wants to cover her costs