A Restaurant at a Popular Colorado Casino Provides Priority Service

question 46

Multiple Choice

A restaurant at a popular Colorado casino provides priority service to player's card holders. The restaurant has 10 tables or booths where customers may be seated. The service time (time a booth or table is occupied) averages 42 minutes once a party is seated. The customer arrival rate is 8 parties per hour, with the parties being equally divided between card holders and people without player's cards. On average, how much longer do parties without player's cards spend in the system, compared to parties with the player's cards?

• A)approx. 30 seconds
• B)approx. 4 minutes
• C)approx. 8 minutes
• D)approx. 32 minutes
• E)It is impossible to say without more information.

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Definitions:

Plantwide Overhead Rate

A single overhead absorption rate used throughout an entire factory or plant, applied uniformly to all cost objects irrespective of the department incurring the overhead.

Unit of Product

This term refers to a single complete product that is ready for sale or has passed through one complete stage of production.

Departmental Overhead Rate Method

An accounting method used to allocate overhead costs to specific departments based on relevant activity bases.

Overhead Resources

The ongoing operational costs required to run a business that are not directly tied to a specific product or service, such as rent, utilities, and general office supplies.