Hiram's lakeside is a popular restaurant located on lake washington in seattle. the owner of the restaurant has been trying to better understand costs at the restaurant and has hired a student intern to conduct an activity-based costing study. the intern, in consultation with the owner, identified three major activities and then completed the first-stage allocations of costs to the activity cost pools. the results appear below:

1- Computation of the activity rate for the activities cost:

    Activity Cost Pool           Activity Measure       Total Cost    Total Activity

Serving a Party of Diners   No. of Party's Served       $33,000    6000 parties

Serving a diner                Number of diners served   $138,000   15000 diners

Serving drinks                 Number of drinks ordered  $24,000   10,000 drinks

For first: $5.5 per setup

For second: $9.2 per hour

For third:   $2.4 drinks

2- The cost per diner for three different parties differ from each other and the overall average cost $16 per diner  because this average cost does not include organization sustaining cost.

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