Question

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 $8.00 per guest check-in, $20.00 per room cleaning, and $4.00 per served meal (not including food). Julie Washington visited the hotel for a 7-night stay. Julie had 6 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.

Answer 1

Answer:

Total cost= $172

Explanation:

Giving the following information:

guest check-in= $8 per guest check-in

room cleaning= $20 per room

meal service= $4 per served meal

Julie Washington visited the hotel for a 7-night stay. Julie had 6 meals in the hotel during the visit.

To calculate the total cost, we need to use the following formula:

Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base

guest check-in= 8*1= 8

room cleaning= 20*7= 140

meal service= 4*6= 24

Total cost= $172