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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 Caring for lawn Caring for garden bedelow maintenance Caring for garden beda-high maintenance Travel to jobs Customer billing and service Activity Measur Square feet of lawn Square feet of low maintenance bedo Square feet of high maintenance beds xile 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 Coutool Caring for law Caring for gaxden beds-low maintenance Caring for garden beds-high maintenance Travel to job Customer billing and service Hatimated Overhead Cont Expected Activ $ 81,000 200,000 square feet of lawn $3),600 28,000 square feet of low maintenance beds $ 58,740 22,000 square feet of high maintenance beds $ 4,600 19,000 miles $ 9,500 26 customers Required: Compute the activity rate for each of the activity cost pools, (Round your answers to 2 decimal places.) Activity Rate 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 per square ft of lawn per square ft of low maintenance beds per square ft of high maintenance beds per mile per customer understand costs at the restaurant and has hired a student intern to conduct an activity-based costing study. The Intern, in consultation with the owner, identified three major activities and then completed the first stage allocations of costs to the activity cost pools. The results appear below. Activity Cost Pool Serving a party of diners Serving a diner Serving drink Activity Measure Number of parties served Number of diners served Number of drinks ordered Total Cost Total Activity $ 14,820 5,700 parties $ 118,110 12,700 diners $ 29,120 10,400 drinks The above costs include all of the costs of the restaurant except for organization-sustaining costs such as rent, property taxes, and top- management salaries. Some costs, such as the cost of cleaning the linens that cover the restaurant's tables, vary with the number of parties served. Other costs, such as washing plates and glasses, depend on the number of diners served or the number of drinks served. Prior to the activity-based costing study, the owner knew very little about the costs of the restaurant. She knew that the total cost for the month (including organization-sustaining costs) was $180,000 and that 12,000 diners had been served. Therefore, the average cost per diner was $15. Required: 182. According to the activity-based costing system, what is the total cost and average cost per diner for serving each of the following parties of diners? (Round your intermediate calculations to 2 decimal places. Round your Total Cost final answers to 2 decimal places and your Average Cost final answers to 3 decimal places.) Total Cont Averago Cost por diner a. A party of four diners who order three drinks in total b. Aparty of four diners who do not order any drinks Aparty of one diner who orders four drink por diner per diner
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