Question
Green Thumb Gardening is a small gardening service that uses activity-based costing to estimate costs for pricing and other purposes. The proprietor of the company
Green Thumb Gardening is a small gardening service that uses activity-based costing to estimate costs for pricing and other purposes. The proprietor of the company believes that costs are driven primarily by the size of customer lawns, the size of customer garden beds, the distance to travel to customers, and the number of customers. In addition, the costs of maintaining garden beds depends on whether the beds are low maintenance beds (mainly ordinary trees and shrubs) or high maintenance beds (mainly flowers and exotic plants). Accordingly, the company uses the five activity cost pools listed below: Activity Cost Pool Activity Measure Caring for lawn Square feet of lawn Caring for garden bedslow maintenance Square feet of low maintenance beds Caring for garden bedshigh maintenance Square feet of high maintenance beds Travel to jobs Miles Customer billing and service Number of customers The company already has completed its first stage allocations of costs and has summarized its annual costs and activity as follows: Activity Cost Pool Estimated Overhead Cost Expected Activity Caring for lawn $ 77,000 190,000 square feet of lawn Caring for garden bedslow maintenance $ 29,600 23,000 square feet of low maintenance beds Caring for garden bedshigh maintenance $ 48,280 17,000 square feet of high maintenance beds Travel to jobs $ 4,200 14,000 miles Customer billing and service $ 8,700 24 customers Required: Compute the activity rate for each of the activity cost pools. (Round your answers to 2 decimal places.)
Green Thumb Gardening is a small gardening service that uses activity-based costing to estimate costs for pricing and other purposes. The proprietor of the company believes that costs are driven primarily by the size of customer lawns, the size of customer garden beds, the distance to travel to customers, and the number of customers. In addition, the costs of maintaining garden beds depends on whether the beds are low maintenance beds (mainly ordinary trees and shrubs) or high maintenance beds (mainly flowers and exotic plants). Accordingly, the company uses the five activity cost pools listed below: Activity Cost Pool Caring for lawn Caring for garden beds-low maintenance Caring for garden beds-high maintenance Travel to jobs Customer billing and service Activity Measure Square feet of lawn Square feet of low maintenance beds Square feet of high maintenance beds Miles Number of customers The company already has completed its first stage allocations of costs and has summarized its annual costs and activity as follows: Estimated Overhead Activity Cost Pool Caring caring Ca Travel to Expected Activity feet of lawn Cast r lawn 77-009 190 , 000 square S UMB n beds-low maintenance 23,000 Squa feet of high maintenance beds for gard $ 29,600 $ 48,280 $ 4,200 $ 8,700 feet of low maintenance beds 17,000 14,000 miles or garden beds-high maintenance Customer billing and service 24 customers Required: Compute the activity rate for each of the activity cost pools. (Round your answers to 2 decimal places.) Activity Cost Pool Activity Rate Caring for lawn per square ft of lawn Caring for garden beds-low maintenance per square ft of low maintenance beds Caring for garden beds-high maintenance per square ft of high maintenance beds Travel to jobs per mile Customer billing and service per customerStep by Step Solution
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