Answered step by step
Verified Expert Solution
Link Copied!

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 activity-based 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 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:
\table[[Activity Cost Pool,Activity Measure],[Caring for lawn,Square feet of lawn],[Caring for garden beds-low maintenance,Square feet of low-maintenance beds],[Caring for garden beds-high maintenance,Square feet of high-maintenance beds],[Travel to jobs,Miles],[Customer billing and service,Number of customers]]
The company completed its first-stage cost allocations and summarized its annual costs and activity as follows:
\table[[Activity Cost Pool,\table[[Estimated Overhead],[Cost]],,Expected Activity],[Caring for lawn,$77,000,190,000,square feet of lawn],[Caring for garden beds-low maintenance,$29,600,30,000,square feet of low-maintenance beds],[Caring for garden beds-high maintenance,$65,040,24,000,square feet of high-maintenance beds],[\table[[Travel to jobs],[Customer billing and service]],$4,400,21,600,miles],[customer biling and service,$9,100,36,customers]]
Required:
Compute the activity rate for each of the activity cost pools.
Note: Round your answers to 2 decimal places.
\table[[Activity Cost Pool,Activity Rate,],[Caring for lawn,,per square feet of lawn],[Caring for garden beds-low maintenance,,per square feet of low-maintenance beds],[Caring for garden beds-high maintenance,,per square feet of high-maintenance beds],[Travel to jobs,,per mile],[Customer billing and service,per customer,]]
image text in transcribed

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

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

Step: 2

blur-text-image

Step: 3

blur-text-image

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

Fundamentals of Financial Accounting

Authors: Fred Phillips, Robert Libby, Patricia Libby

5th edition

978-0078025914

Students also viewed these Accounting questions