Grogam Catering Uses Activity-Based Costing for Its Overhead Costs $\quad$

question 96

Multiple Choice

Grogam Catering uses activity-based costing for its overhead costs. The company has provided the following data concerning the activity rates in its activity-based costing system: $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$$\text { Activity Cost Pools }$
$\begin{array}{|l|r|r|} \hline& \text { Preparing Meals } & \text { Arranging Functions } \\\hline \text { Wages } & \$ 1.15 & \$ 110.00 \\\hline \text { Supplies } & \$ 0.35 & \$ 380.00 \\\hline \text { Other expenses } & \$ 0.25 & \$ 70.00\\\hline \end{array}$
The number of meals served is the measure of activity for the Preparing Meals activity cost pool. The number of functions catered is used as the activity measure for the Arranging Functions activity cost pool.

Management would like to know whether the company made any money on a recent function at which 100 meals were served. The company catered the function for a fixed price of $21.00 per meal. The cost of the raw ingredients for the meals was $8.25 per meal. This cost is in addition to the costs of wages, supplies, and other expenses detailed above.

-According to the activity-based costing system,what was the total cost (including the costs of raw ingredients) of the function mentioned above,rounded to the nearest whole dollar?

• A) $910.
• B) $1,060.
• C) $1,560.
• D) $1,760.

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Definitions:

Procedural Justice

Perceptions of fairness of processes or procedures used to determine distributions.

Instrumental Component

The practical usefulness or functionality of something as a means to achieve an end.

Curfew

A regulation requiring people to remain indoors during designated hours, typically imposed by a government or authoritative body.

Procedural Justice

The fairness and transparency of the processes that lead to outcomes or decisions.