ni.8 Exercise 7-14 (Algo) Calculating and Interpreting Activity-Based Costing Data [LO7-3, LO7-4]Hiram's Lakeside is a popular restaurant located on Lake Washington in Seattle. The restaurant's owner wants to better understand hiscosts and hired a student intern to conduct an activity-based costing study. The intern identified three activities, completed the first-stage cost allocations and gathered the activity measure data shown below.Activity Cost PoolServing a party of dinersServing a dinerActivity MeasureNumber of parties servedNumber of diners servedNumber of drinks orderedTotal Cost$ 17,920$ 112,140Serving drinks$ 36,720The above costs exclude 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. Othercosts, 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 restaurant costs. She only knew the total cost for themonth (including organization-sustaining costs) was $180,000 and 12,000 diners had been served. Therefore, the average cost perdiner was $15.Required:1 and 2. According to the activity-based costing system, what is the total cost and average cost per diner for serving each of thefollowing parties of diners?Total Activity5,600 parties12,600 diners10,800 drinksNote: Round your intermediate calculations to 2 decimal places. Round your Total Cost final answers to 2 decimal places and yourAverage Cost final answers to 3 decimal places.a. A party of three diners who order four drinks in total.b. A party of two diners who do not order any drinks.c. A party of one diner who orders two drinks.Total CostAverage Costper dinerper dinerper diner

Activity-based costing is a method of allocation of overhead cost. Under this method various…

Hiram's Lakeside is a popular restaurant located on Lake Washington in Seattle. The restaurant's owner wants to better understand costs and hired a student intern to conduct an activity-based costing study. The intern identified three activities, completed the first tage cost allocations and gathered the activity measure data shown below. Activity Cost Pool Serving a party of diners Serving a diner Total Cost $ 17,920 $ 112,140 Serving drinks $ 36,720 The above costs exclude 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 Activity Measure Number of parties served Number of diners served Number of drinks ordered Total Activity 5,600 parties 12,600 diners 10,800 drinks

Hiram's Lakeside is a popular restaurant located on Lake Washington in Seattle. The restaurant's owner wants to better understand costs and hired a student intern to conduct an activity-based costing study. The intern identified three activities, completed the first tage cost allocations and gathered the activity measure data shown below. Activity Cost Pool Serving a party of diners Serving a diner Total Cost $ 17,920 $ 112,140 Serving drinks $ 36,720 The above costs exclude 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 Activity Measure Number of parties served Number of diners served Number of drinks ordered Total Activity 5,600 parties 12,600 diners 10,800 drinks

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter12: Activity-based Management

Section: Chapter Questions

Problem 23P: Joseph Fox, controller of Thorpe Company, has been in charge of a project to install an...

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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 Activity Measure Total Cost Total Activity Serving a party of diners Number of parties served $19,800 6,000 parties Serving a diner Number of diners served $96,250 12,500 diners Serving drinks Number of drinks ordered $36750 10,500 drinks 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…
ignment-Activity Based Costing Saved 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 Activity Measure Number of parties served Number of diners served Total Activity 5,000 parties $ 116,840 12,700 diners $34,560 10,800 drinks Total Cost 02:23:48 $ 15,000 Number of drinks ordered kipped 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. eBook Print Some costs, such as the cost of cleaning the linens that cover the restaurant's…
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 Activity Measure Number of parties served Number of diners served Total Activity 5,600 parties 12,100 diners 10,900 drinks Total Cost $ 15,120 $ 107, 690 $ 31,610 Number of 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,…
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 Activity Measure Number of parties served Number of diners served i Number of drinks ordered Total Cost $ 33,000 $ 138,000 $ 24,000 Total Activity 6,000 parties 15,000 diners 10,000 drinks 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,…
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 Activity Measure Number of parties served Number of diners served Number of drinks ordered Total Cost $ 12,240 $ 118,680 $ 27,040 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…
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 Activity Measure Number of parties served Number of diners served Number of drinks ordered Total Cost $ 14,250 $ 102,920 $ 29,700 Total Activity 5,700 parties 12,400 diners 11,000 drinks 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…
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 Activity Measure Number of parties served Number of diners served Number of drinks ordered Total Cost $ 15,950 $ 112,800 $ 33,480 Total Activity 5,500 parties 12,000 diners 10,800 drinks 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…
Garrell Corporation is conducting a time-driven activity-based costing study in its Customer Support Department. The company has provided the following data to aid in that study: Time-driven activity rate (cost per unit of activity) Activity cost pool: Receiving Calls Resolving Issues Settling Disputes Cost Object Data: Number of calls received Number of issues resolved Number of disputes settled Customer P 31 17 1 $5.46 $8.58 $13.26 Customer Q 21 10 Required: Using time-driven activity-based costing, determine the total Customer Support Department cost assigned to cach customer.
Durban Metal Products, Limited, of the Republic of South Africa makes speclalty metal parts used In applications ranging from the cutting edges of bulldozer blades to replacement parts for Land Rovers. The company uses an activity-based costing system for Internal decislon-making purposes. The company has four actlvity cost pools as listed below: Activity Rate $ 17.70 per direct labor-hour $ 358.08 per customer order $ 78.08 per testing hour $ 1,492.00 per sales call Activity Cost Pool Order size Activity Measure Number of direct labor-hours Customer orders Number of custoner orders Product testing Selling Number of testing hours Number of sales calls The managing director of the company would like Information concerning the cost of a recently completed order for heavy- duty traller axles. The order requlred 100 direct labor-hours, 17 hours of product testing, and 5 sales calls. Required: What Is the total overhead cost assigned to the order for heavy-duty traller axles? Activity Cost…
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 Activity Measure Number of parties served Number of diners served Number of drinks ordered Total Cost $ 28,350 $ 113,160 $ 40,170 Total Activity 5,500 parties 12,300 diners 10,300 drinks 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…
ng Enabled: Assignment 2 i Saved Siegel Corporation manufactures a product available in both a deluxe and a regular model. The company has made the regular model for years; the deluxe model was introduced several years ago to capture a new segment of the market. Since the introduction of the deluxe model, the company's profits have steadily declined, and management has become concerned about the accuracy of its costing system. Sales of the deluxe model have been increasing rapidly. 3:56 Overhead is applied to products on the basis of direct labour-hours. At the beginning of the current year, management estimated that $2,610,400 in overhead costs would be incurred and the company would produce and sell 15,000 units of the deluxe model and 63,616 units of the regular model. The deluxe model requires 2.8 hours of direct labour time per unit, and the regular model requires 1.5 hours. Materials and labour costs follow: Direct materials cost per unit Deluxe $195 22 Regular $99 16 Direct…
Hiram's Lakeside is a popular restaurant located on Lake Washington in Seattle. The restaurant's owner wants to better understand his costs and hired a student intern to conduct an activity-based costing study. The Intern identified three activities, completed the first- stage cost allocations and gathered the activity measure data shown below. Activity Cost Pool Serving a party of diners Serving a diner Serving drinks Activity Measure Number of parties served Number of diners served Number of drinks ordered Total Cost $ 18,290 $ 112,840 $ 33,990 Total Activity 5,900 parties 12,400 diners 10,300 drinks The above costs exclude 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…