Business, 24.04.2020 18:01 leandrogarin37p2g5ds

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 four people to serve an 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 Formal Dinner
Advertising (parties $100 per party $100 per party
Planning (parties) $75 per party $125 per party
Renting equipment $50 per party plus $75 per party plus
Renting equipment (parties, guests) $10 per guest $20 per guest
Obtaining insurance (parties) $200 per party $400 per party
Serving (parties, servers) $50 per server per party $75 per server per party
Preparing food (guests) $20 per guest $30 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?

Answers: 1

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Cathy, the manager of Cathy's Catering, Inc., uses activity-based costing to compute the costs of he...

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