7-3

5 25 % 70% 60% % 25% Driver and guard wages Vehicle operating expense Vehicle depreciation Customer representative salaries 15% 0% 0% 20% 90% 30% 60% 0% 10% 50% 0% 0% 50% and expenses Office expenses Administrative expenses.... 10s, 5% 35% 1 Complete the first stage allocations of costs to activity cost pools as illustrated in I EXERCISE 7-3 Compute Activity Rates L07-3 Green Thumb Gardening is a small gardening service that uses activity-based costi costs for pricing and other purposes. The proprietor of the company believes thatct primarily by the size of customer lawns, the size of customer garden beds, the dista di to travel of maintaining garden beds nigh tenance beds (mainly flowers and exotic plants). Accordingly, the company uses the f cost pools listed below: on whether the beds are low maintenance beds (mainly ordinary trees and shrubs) o Activity Measure Activity Cost Pool Square feet of lawn .....Square feet of low maintenance beds Caring for garden beds-low maintenance ...... Caring for garden beds-high maintenance. ....Square feet of high maintenance beds Travel to jobs Customer billing and service Miles . Number of customers The company already has completed its first stage allocations of costs and has summarized it annual costs and activity as follows: Estimated Overhead Cost Activity Cost Pool Expected Activity . $72,000 150,000 square feet of lawn Caring for garden beds-low maintenance $26,400 20,000 square feet of low maintenance bed $41,400 15,000 square feet of high maintenance be Caring for garden beds-high maintenance Travel to jobs $3,250 12,500 miles $8,750 25 customers