building your skills on Communication in Practice case
Answers to Chapter 3 exercises from the book Introduction to Managerial Accounting 6th edition on Activity Based costing. Attached downloaded sample file doesn't the answers to all exercises in Chapter 3...particularly 3-14A; 3-15A and building your skills on Communication in Practice case
Gino’s Restaurant is a popular restaurant of 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: Activity Cost Pool Activity Measure Serving a party of diners Number of parties served Serving a diner Number of diners served Serving drinks Number of drinks ordered A 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. Serving a Party Serving a Dinner Serving Drinks Total Total cost $32,800 $211,200 $69,600 $313,600 Total activity 8,000 parties 32,000 diners 58,000 drinks 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 $313,600 and that 32,000 diners had been served. Therefore, the average cost per diner was $9.80 ($313,600 ÷ 32,000 diners = $9.80per diner). Required: 1. Compute the activity rates for each of the three activities. (Round your answers to 2 decimal places.) Cost per unit of activity Serving a Party $ per party Serving a Diner $ per diner Serving Drinks $ per drink 2. According to the activity-based costing system, what is the total cost of serving each of the following parties of 4.10 6.60 1.20
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Posted 19 Dec 2017 06:12 AM
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