Grodin Catering Uses Activity-Based Costing for Its Overhead Costs

question 3

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

• A) $231
• B) $381
• C) $131
• D) $81

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Definitions:

Negative Stereotypes

Unfair and oversimplified beliefs or ideas about a group of people, typically leading to prejudicial attitudes and discrimination.

Social Interaction

The process by which individuals act and react in relation to others, shaping social relationships and society.

Social Zone

A concept referring to a region or area within a society that shares similar social characteristics or interactions, which can influence the behavior of its members.

Intimate Zone

The physical space immediately surrounding an individual, typically reserved for close friends, family, or romantic partners, indicating a high level of comfort and personal connection.