Activity-Based Costing for a Service Business Sterling Hotel uses activity-based costing to determine the cost of servicing customers. There are three activity pools: guest check-in, room cleaning, and meal service. The activity rates associated with each activity pool are $8.60 per guest check-in, $24.00 per room cleaning, and $3.00 per served meal (not including food). Janelle Washington visited the hotel for a 4-night stay. Janelle had 7 meals in the hotel during the visit. Determine the total activity-based cost for Washington's visit during the month. Round your answer to the nearest cent.

Question

Mila Gentry

Business

24 October, 18:16

Activity-Based Costing for a Service Business Sterling Hotel uses activity-based costing to determine the cost of servicing customers. There are three activity pools: guest check-in, room cleaning, and meal service. The activity rates associated with each activity pool are $8.60 per guest check-in, $24.00 per room cleaning, and $3.00 per served meal (not including food). Janelle Washington visited the hotel for a 4-night stay. Janelle had 7 meals in the hotel during the visit. Determine the total activity-based cost for Washington's visit during the month. Round your answer to the nearest cent.

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Answers (1)

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Belinda Townsend · Answer 1

Total cost = $126

Explanation:

Giving the following information:

There are three activity pools:

$8.60 per guest check-in

$24.00 per room cleaning

$3.00 per served meal.

Janelle Washington visited the hotel for a 4-night stay. Janelle had 7 meals in the hotel during the visit.

We will assume that the room gets clean every day:

Total cost = Estimated activity-based cost * Actual amount of allocation base

Total cost = 8.60*1 + 24*4 days + 3*7 meals = $125.6