Grodin Catering Uses Activity-Based Costing for Its Overhead Costs

question 2

Multiple Choice

Grodin 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 180 meals were served. The company catered the function for a fixed price of $15.00 per meal. The cost of the raw ingredients for the meals was $9.65 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.
-According to the activity-based costing system, what was the total cost (including the costs of raw ingredients) of the function mentioned above? (Round to the nearest whole dollar.)

• A) $1,969
• B) $1,819
• C) $2,469
• D) $2,669

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Definitions:

Innovative Vision

The ability to foresee novel ideas, trends, or concepts that can lead to the creation of groundbreaking products or solutions.

Leadership Effectiveness

The extent to which a leader is able to inspire, influence, and enable others to contribute toward the effectiveness and success of their organization.

Disciplining Employees

The process of enforcing organizational rules and correcting employee behavior that does not align with company standards.

Crowdsourcing

The practice of obtaining information or input into a project or task by enlisting the services of a large number of people, typically via the Internet.