The application of activity-based costing in a Hong Kong buffet restaurant

Abstract

Previous research has shown that Activity Based Costing is a feasible method for establishing overall menu profitability. In this study, a model for Activity Based Costing that had been applied to a fine dining restaurant was tested in a buffet style restaurant in Hong Kong, China. The outcome of this study indicates that the restaurant model could also be applied to a buffet style restaurant with good results. In addition, the model was able to trace undistributed operating expenses to individual dinner buffet items, thereby revealing that every time the restaurant sold a dinner buffet, it realized a loss of HK$33. © 2005, Taylor & Francis Group, LLC. All rights reserved.