Budgeted annual costs:

Additional information:

Only requirement 3 needs an answer.

Tree and Lawn USA provides lawn care and landscaping services to commercial clients. Tree and Lawn USA uses activity-based costing to bid on jobs and to evaluate their profitability. Tree and Lawn USA reports the following budgeted annual costs: (Click the icon to view budgeted annual costs.) E: (Click the icon to view additional information.) i Data Table X 69 Wages and salaries Depreciation Supplies Other overhead Total overhead costs 345,000 60,000 85,000 152,000 $ $ 642,000 John Butler, controller of Tree and Lawn USA, has established four activity cost pools and the following budgeted activity for each cost pool: Activity Cost Pool Activity Measure Total Activity for the Year Estimating jobs Number of job estimates 100 estimates Lawn care Number of direct labor-hours 5,000 direct labor-hours Landscape design Number of design hours 600 design hours Other Facility-sustaining costs that are not allocated to jobs Not applicable Butler estimates that Tree and Lawn USA's costs are distributed to the activity-cost pools as follows: Estimating Landscape Jobs Lawn Care Design Other Total Wages and salaries 5% 65% 25% 5% 100% Depreciation 20% 45% 10% 25% 100% Supplies 0% 100% 0% 0% 100% Other overhead 15% 55% 10% 20% 100% Weston Office Park, a new development in a nearby community, has contacted Tree and Lawn USA to provide an estimate on landscape design and annual lawn maintenance. The job is estimated to require a single landscape design requiring 40 design hours in total and 100 direct labor-hours annually. Tree and Lawn USA has a policy of pricing estimates at 150% of cost. Requirement 1. Allocate Tree and Lawn USA's costs to the activity-cost pools and determine the activity rate for each pool. Start by allocating Tree and Lawn USA's costs to the activity-cost pools. (Enter zero in any cell if no amount should be allocated to the activity-cost pool.) Wages and salaries Depreciation Supplies Other overhead Estimating jobs $ 17,250 $ 12,000 0 22,800 Lawn Landscape care design 224,250 $ 86,250 $ 27,000 6,000 85,000 83,600 15,200 Other 17,250 $ 15,000 0 30,400 Total 345,000 60,000 85,000 152,000 $ 52,050 $ 419,850 $ 107,450 $ 62,650 $ Total 642,000 = Now select the formula used to determine the cost driver rates, then calculate the activity rate for each pool. (Abbreviation used: DLH = Direct labor-hour. Round the answers to the nearest cent, "X.XX".) Cost Total quantity of cost driver Cost driver rate Estimating jobs $ 52,050 100 = $ 520.50 per estimate Lawn care $ 419,850 5,000 $ 83.97 per DLH Landscape design $ 107,450 600 = $ 179.08 per design hour Requirement 2. Estimate total cost for the Weston Office Park job. How much would Tree and Lawn USA bid to perform the job? Calculate the total costs and bid amount Tree and Lawn USA would charge Weston Office Park. (Round the answers to the nearest cent, "X.XX".) Estimating jobs $ 520.50 Lawn care $ 8,397.00 $ 7,163.20 Landscape design Total costs $ 16,080.70 Markup multiplier 150 % $ 24, 121.05 Bid estimate $ Requirement 3. Tree and Lawn USA does 33 landscape designs for its customers each year. Estimate the total cost for the Weston Office park job if Tree and Lawn USA allocated costs of the Landscape Design activity based on the number of landscape designs rather than the number of landscape design-hours. How much would Tree and Lawn USA bid to perform the job? Which cost driver do you prefer for the Landscape Design activity? Why? How much would Tree and Lawn USA bid to perform the job? Estimating jobs Lawn care Landscape design Total costs Markup multiplier Bid estimate