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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
Green Thumb Gardening is a small gardening service that uses activitybased 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: tableActivity Cost Pool,Activity MeasureCaring for lawn,Square feet of lawnCaring for garden bedslow maintenance,Square feet of low maintenance bedsCaring for garden bedshigh maintenance,Square feet of high maintenance bedsTravel to jobs,MilesCustomer 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: tableActivity Cost Pool,tableEstimatedOverheadCostExpected ActivityCaring for lawn,$ square feet of lawntableCaring for garden bedslowmaintenance$ square feet of low maintenance bedstableCaring for garden bedshighmaintenance$ square feet of high maintenance bedsTravel to jobs,$ milesCustomer billing and service,$ customers Required: Compute the activity rate for each of the activity cost pools. Page
Green Thumb Gardening is a small gardening service that uses activitybased 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:
tableActivity Cost Pool,Activity MeasureCaring for lawn,Square feet of lawnCaring for garden bedslow maintenance,Square feet of low maintenance bedsCaring for garden bedshigh maintenance,Square feet of high maintenance bedsTravel to jobs,MilesCustomer 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:
tableActivity Cost Pool,tableEstimatedOverheadCostExpected ActivityCaring for lawn,$ square feet of lawntableCaring for garden bedslowmaintenance$ square feet of low maintenance bedstableCaring for garden bedshighmaintenance$ square feet of high maintenance bedsTravel to jobs,$ milesCustomer billing and service,$ customers
Required:
Compute the activity rate for each of the activity cost pools.
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