uses activity-based costing to determine the cost of servicing customers. There are three activity pools: guest check-in, room cleaning, and meal service. The activity rates associated with each activity pool are $9 per guest check-in, $15 per room cle

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 Activity Measure Total Cost Total Activity Serving a party of diners Number of parties served $ 12,760 5,800 parties Serving a diner Number of diners served $ 105,270 12,100 diners Serving drinks Number of drinks ordered $ 24,960 10,400 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…

Alyeski Tours operates day tours of coastal glaciers in Alaska on its tour boat the Blue Glacier. Management has identified two cost drivers-the number of cruises and the number of passengers-that it uses in its budgeting and performance reports. The company publishes a schedule of day cruises that it may supplement with special sailings if there is sufficient demand. Up to 86 passengers can be accommodated on the tour boat. Data concerning the company's cost formulas appear below: Vessel operating costs Advertising Administrative costs Insurance Required: Prepare the company's flexible budget for July. Fixed Cost per Month $6,600 $ 2,500 $ 5,500 $ 3,300 For example, vessel operating costs should be $6,600 per month plus $473.00 per cruise plus $3.50 per passenger. The company's sales should average $30.00 per passenger. In July, the company provided 56 cruises for a total of 3,150 passengers. Alyeski Tours Flexible Budget For the Month Ended July 31 Revenue Expenses: Vessel operating…

2. Assume that Kizzle's management allocates Maintenance costs based on the number of service calls. Further assume that in a given period, the Janitorial, Mixing, and Cooking activities incur 16, 40, and 24 service calls, respectively, and that the Janitorial and Maintenance costs of that period are $3,000 and $4,200, respectively. Determine the total costs allocated from each support activity to the other three activities using the reciprocal services method. Malntenance cost allocation: Janitorial: Mixing: $4 Cooking: Janitorial cost allocation: Maintenance: Mixing: Cooking: 3. The company is considering changing from the reciprocal service method to a simpler method. Why should the company continue with the reciprocal service method? a. It is complex, but more accurate. b. It can be practiced if the company has sufficient resources and capacity. C. The simpler cost allocation methods are less accurate. d. All the above.