First-stage allocation, activity-based costing, service sector. LawnCare USA provides lawn care and landscaping services to commercial clients. LawnCare USA uses activity-based costing to bid on jobs and to evaluate their profitability. LawnCare USA reports the following annual costs: Wages and salaries Depreciation Supplies $360,000 72,000 120,000 Other overhead 288,000 Total overhead costs $840,000 John Gilroy, controller of LawnCare USA, has established four activity cost pools: Activity Cost Pool Activity Measure Total Activity for the Year Estimating jobs Number of job estimates 250 estimates Lawn care Number of direct labor-hours 10,000 direct labor-hours Landscape design Number of design hours Facility-sustaining costs that are not allocated to jobs 500 design hours Not applicable Other Gilroy estimates that LawnCare USA's costs are distributed to the activity-cost pools as follows: Estimating Jobs Lawn Care Landscape Design Other Total 5% Wages and salaries Depreciation Supplies 70% 15% 10% 100% 10% 65% 10% 15% 100% 0% 100% 0% 0% 100% Other overhead 15% 50% 20% 15% 100% Sunset Office Park, a new development in a nearby community, has contacted LawnCare 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 250 direct labor-hours annually. LawnCare USA has a policy of pricing estimates at 150% of cost. 1. Allocate LawnCare USA's costs to the activity-cost pools and determine the activity rate for each pool. 2. Estimate total cost for the Sunset Office Park job. 3. How much should LawnCare USA bid to perform the job? 4. Sunset Office Park asks LawnCare USA to give an estimate for providing its services for a 2-year period. What are the advantages and disadvantages for LawnCare USA to provide a 2-year estimate?