Meade Nuptial Bakery makes very elaborate wedding cakes to order. The company has an activity-based...
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Meade Nuptial Bakery makes very elaborate wedding cakes to order. The company has an activitybased costing system with three activity cost pools. The activity rate for the SizeRelated activity cost pool is $ per guest. The greater the number of guests, the larger the cake. The activity rate for the ComplexityRelated cost pool is $ per tier. Cakes with more tiers are more complex. Finally, the activity rate for the OrderRelated activity cost pool is $ per order. Each wedding involves one order for a cake. The activity rates include the costs of raw ingredients such as flour, sugar, eggs, and shortening. The activity rates do not include the costs of purchased decorations such as miniature statues and wedding bells, which are accounted for separately.
Data concerning two recent orders appear below:
Ericson Wedding Haupt Wedding
Number of reception guests
Number of tiers on the cake
Cost of purchased decorations for cake $ $
Assuming that the company charges $ for the Haupt wedding cake, what would be the overall margin on the order?
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