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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

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: 

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:

Activity Cost Pool

Estimated Overhead Cost

Expected Activity

Caring for lawn

$ 77,000

185,000

square feet of lawn

Caring for garden beds-low maintenance

$ 29,600

25,000

square feet of low-maintenance beds

Caring for garden beds-high maintenance

$ 52,630

19,000

square feet of high-maintenance beds

Travel to jobs

$ 3,800

16,000

miles

Customer billing and service

$ 7,900

20

customers

Required:

Compute the activity rate for each of the activity cost pools.


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