Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Green Thumb Gardening is a small gardening service using activity - based costing to estimate costs for pricing and other purposes. The owner of the
Green Thumb Gardening is a small gardening service using activitybased costing to estimate costs for pricing and other purposes. The owner of the company believes 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 depend on whether the beds are lowmaintenance beds mainly ordinary trees and shrubs or highmaintenance 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 lowmaintenance beds
Caring for garden bedshigh maintenance Square feet of highmaintenance beds
Travel to jobs Miles
Customer billing and service Number of customers
The company completed its firststage cost allocations and summarized its annual costs and activity as follows:
Activity Cost Pool Estimated Overhead Cost Expected Activity
Caring for lawn $ square feet of lawn
Caring for garden bedslow maintenance $ square feet of lowmaintenance beds
Caring for garden bedshigh maintenance $ square feet of highmaintenance beds
Travel to jobs $ miles
Customer billing and service $ customers
Required:
Compute the activity rate for each of the activity cost pools.Green Thumb Gardening is a small gardening service using activitybased costing to estimate costs for pricing and other purposes.
The owner of the company believes 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 depend on whether
the beds are lowmaintenance beds mainly ordinary trees and shrubs or highmaintenance beds mainly flowers and exotic plants
Accordingly, the company uses the five activity cost pools listed below:
The company completed its firststage cost allocations and summarized its annual costs and activity as follows:
Required:
Compute the activity rate for each of the activity cost pools.
Note: Round your answers to decimal places.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started