September 2023 Sven s Cookhouse is a popular restaurant located on Lake Union in Seattle The owner of the restaurant has been trying
2024 MANAGERIAL ACCOUNTING Assignment Help
Sven s Cookhouse is a popular restaurant located on Lake Union in Seattle The owner of the restaurant has been trying 2023
Sven’s Cookhouse is a popular restaurant located on Lake Union 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. 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 $ 19,470 5,900 parties Serving a diner Number of diners served $ 110,110 12,100 diners Serving a drink Number of drinks ordered $ 36,750 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. A group of diners who ask to sit at the same table are 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. Prior to the activity-based costing study, the owner knew very little about the costs of the restaurant. He knew that the total cost for the month (including organization-sustaining costs) was $180,000 and that 12,000 diners had been served. Therefore, the average cost per diner was $15.
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