Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Green Thumb Gardening is a small gardening service that uses activity - based costing to estimate costs for pricing and other purposes. The proprietor of

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 $ 77,800180,000 square feet of lawn
Caring for garden bedslow maintenance $ 30,40025,000 square feet of low maintenance beds
Caring for garden bedshigh maintenance $ 52,82019,000 square feet of high maintenance beds
Travel to jobs $ 4,20016,000 miles
Customer billing and service $ 8,70034 customers
Required:
Compute the activity rate for each of the activity cost pools. (Round your answers to 2 decimal places.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Corporate Financial Reporting And Analysis A Global Perspective

Authors: S. David Young, Jacob Cohen, Daniel A. Bens

4th Edition

1119494575, 978-1119494577

More Books

Students also viewed these Accounting questions

Question

7. Explain why retirees may be valuable as part-time employees.

Answered: 1 week ago

Question

3. Provide advice on how to help a plateaued employee.

Answered: 1 week ago