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

Activities (and cost drivers)	Afternoon Picnic			Formal Dinner
Advertising (parties)	$	79	per party	$	79	per party
Planning (parties)	$	72	per party	$	104	per party
Renting equipment	$	45	per party plus	$	76	per party plus
(parties, guests)	$	11	per guest	$	24	per guest
Obtaining insurance (parties)	$	250	per party	$	380	per party
Serving (parties, servers)	$	40	per server per party	$	67	per server per party
Preparing food (guests)	$	22	per guest	$	32	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? (Round your answers to 2 decimal places.)

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Expert Solution

ekkarill92 answered 1 year ago

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