Business, 05.06.2020 17:01 selene29

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 5 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 Formal Dinner Advertising (parties) $ 89 per party $ 89 per party Planning (parties) $ 90 per party $ 134 per party Renting equipment $ 51 per party plus $ 77 per party plus (parties, guests) $ 10 per guest $ 20 per guest Obtaining insurance (parties) $ 155 per party $ 430 per party Serving (parties, servers) $ 58 per server per party $ 79 per server per party Preparing food (guests) $ 19 per guest $ 27 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.

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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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