Evaluate the cost of a 20-guest afternoon picnic

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Reference no: EM1377476

Cathy, the manager of Cathy's Catering, Inc., uses activity-based costing to evaluate the costs of her catered parties. Each party is limited to 20 guests and needs 4 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 given:

Activities (and cost drivers) Afternoon Picnic Formal Dinner
Advertising (parties) $ 89 per party $ 89 per party
Planning (parties) $ 64 per party $ 146 per party
Renting equipment $ 47 per party plus $ 70 per party plus
(parties, guests) $ 14 per guest $ 20 per guest
Obtaining insurance (parties) $ 240 per party $ 360 per party
Serving (parties, servers) $ 57 per server per party $ 76 per server per party
Preparing food (guests) $ 16 per guest $ 32 per guest

Per party costs do not vary with the number of guests.

Required:
(a) Evaluate the cost of a 20-guest afternoon picnic.

Afternoon picnic $

(b) Evaluate the cost of a 20-guest evening formal dinner.

Evening formal dinner $

(c) How much should Cathy charge for every guest for each type of party if she needs to cover her costs?

Reference no: EM1377476

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