2. BBQ Bangladesh is a popular restaurant located on Dhaka. 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. She then completed the first-stage allocations of costs to the activity cost pools, using data from last month's operations. The results appear below: Activity Cost Pool Activity Measure Total Cost Total Activity Serving a party of diners ... . Number of parties served $12,000 5,000 parties Serving a diner Number of diners served $90,000 12,000 diners Serving a drink Number of drinks ordered $26,000 10,000 drinks Required: 1. Estimate the activity rate of each cost pool 2 According to the activity-based costing system, what is the total cost of serving each of the following parties of diners? a. A party of four diners who order three drinks in total. b. A party of two diners who do not order any drinks. c. A lone diner who orders two drinks.

2. BBQ Bangladesh is a popular restaurant located on Dhaka. 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. She then completed the first-stage allocations of costs to the activity cost pools, using data from last month's operations. The results appear below: Activity Cost Pool Activity Measure Total Cost Total Activity Serving a party of diners ... . Number of parties served $12,000 5,000 parties Serving a diner Number of diners served $90,000 12,000 diners Serving a drink Number of drinks ordered $26,000 10,000 drinks Required: 1. Estimate the activity rate of each cost pool 2 According to the activity-based costing system, what is the total cost of serving each of the following parties of diners? a. A party of four diners who order three drinks in total. b. A party of two diners who do not order any drinks. c. A lone diner who orders two 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

Chapter3: Cost Behavior

Section: Chapter Questions

Problem 39P: Randy Harris, controller, has been given the charge to implement an advanced cost management system....

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