Groenen Catering Uses Activity-Based Costing for Its Overhead Costs

question 5

Multiple Choice

Groenen 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: 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 120 meals were served. The company catered the function for a fixed price of $20.00 per meal. The cost of the raw ingredients for the meals was $13.05 per meal. This cost is in addition to the costs of wages, supplies, and other expenses detailed above.
For the purposes of preparing action analyses, management has assigned ease of adjustment codes to the costs as follows: wages are classified as a Yellow cost; supplies and raw ingredients as a Green cost; and other expenses as a Red cost.

-Suppose an action analysis report is prepared for the function mentioned above.What would be the "yellow margin" in the action analysis report? (Round to the nearest whole dollar. )

• A)$229
• B)$334
• C)$279
• D)$154

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Definitions:

Temperature Perception

The sensory detection and interpretation of changes in external and internal temperature by the body.

Cold Receptors

Specialized nerve receptors in the skin that detect cold temperatures and signal this information to the brain.

Pain Receptors

Sensory nerve cells that respond to damaging or potentially damaging stimuli by sending nerve signals to the spinal cord and brain, triggering the sensation of pain.

Hot Objects

Items that have absorbed or are emitting a high level of thermal energy, often perceivable through the sensation of heat upon contact.