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

question 20

Multiple Choice

Grodt 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 }$
$\begin{array} { | l | r | r | } \hline & \text { Preparing Meals } & \text { Arranging Functions } \\\hline \text { Wages } & \$ 0.85 & \$ 110.00 \\\hline \text { Supplies } & \$ 0.50 & \$ 310.00 \\\hline \text { Other expenses } & \$ 0.30 & \$ 120.00 \\\hline\end{array}$ 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 60 meals were served. The company catered the function for a fixed price of $19.00 per meal. The cost of the raw ingredients for the meals was $8.60 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) $505.
• B) $655.
• C) $1,155.
• D) $1,355.

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Definitions:

Hydrotherapy

The use of water in the treatment of different conditions, including arthritis and related rheumatic complaints, through exercises and baths.

Fluidotherapy

A technique for stimulating healing, particularly in the hands and feet, by placing the affected body part in a container of glass beads that are heated and agitated with hot air.

Whirlpool

A rapidly rotating mass of water in a river or sea into which objects may be drawn, typically caused by the meeting of conflicting currents.

Thermotherapy

The application of heat to the body to treat a disorder or injury.