Green Thumb Landscaping: Performance Report under Normal Costing via ABC Using normal costing, compute operating income for each operating department. Then, compute the Indirect Costs Over-Applied / UnderApplied for each operating department and the actual operating income. Does the variance increase or decrease operating income? A decrease in operating income is not preferred and Unfavorable. Thus, we will enter unfavorable variance (such as underapplied overhead) as a negative number bocause it decreases roported operating income. An increase in operating income is preferred and Favorable. Thus, we will enter favorable varlance (such overapplied overhead) as a positive number because it increases reported operating income. Rounded all answers to whole dollars. For New Lawn Installations: 1. Total Overhead Applied under ABC Costing 2. Operating Income under ABC Costing 3. Total Overhead Actual under ABC Costing 4. Over- or Under-Applied Overhead under ABC Costing 5. Operating Income Adjusted Enter profit as a positive number; loss as a negative number. 6. Compute Over-Applied / Under-Applied for Estimating Jobs 7. Compute Over-Applied / Under-Applied for Travel to Jobs For Low Maintenance Lawns: 1. Total Overhead Applied under ABC Costing 2. Operating Income under ABC Costing 3. Total Overhead Actual under ABC Costing 4. Over- or Under-Applied Overhead under ABC Costing 5. Operating Income Adjusted Enter profit as a positive number; loss as a negative number. 6. Compute Over-Applied / Under-Applied for Designing Landscapes 7. Compute Over-Applied / Under-Applied for Maintaining Landscapes For High Maintenance Lawns: 1. Total Overhead Applied under ABC Costing 2. Operating Income under ABC Costing 3. Total Overhead Actual under ABC Costing 4. Over- or Under-Applied Overhead under ABC Costing 5. Operating Income Adjusted Enter profit as a positive number; loss as a negative number. 6. Compute Over-Applied / Under-Applied for Travel to Jobs 7. Compute Over-Applied / Under-Applied for Maintaining Landscapes Green Thumb Landscaping: Performance Report under Normal Costing Using normal costing, compute operating income for each operating department. Then, compute the Indirect Costs Over-Appied / UnderApplied for each operating department and the actual operating income. Does the variance increase or decrease operating income? A decrease in operating income is not preferred and Unfavorable. Thus, we will enter unfavorable variance (such as underapplied overhead) as a negative number because it decreases reported operating income. An increase in operating income is preferred and Favorable. Thus, we will enter favorable variance (such overapplied overhead) as a positive number because it increases reported operating income. Green Thumb Landscaping Budgeted Indirect Costs \begin{tabular}{lc} Indirect Labor & $216,000 \\ Depreciation on Tools \& Equipment & $400,000 \\ Rent Expense for Trucks \& Heavy Eq & $110,000 \\ Salaries of Operations Supervisors & $540,000 \\ Office Rent \& Utilities & $108,000 \\ Office Salaries & $240,000 \\ Landscape Designers Salaries & $280,000 \\ Marketing Expenses & $60,000 \\ \cline { 2 - 2 } Total & $1,954,000 \\ \hline \end{tabular} EstimatingJobsActivityPoolNumberofEstimatesActivityMeasure3,900BudgetedActivity Designing Landscapes Number of Designs 920 Travel To Jobs Number of Jobs 3,000 InstallingLandscapesNumberofNewLandscapes500 MaintainingLandscapesMaintenanceJobsNumberof1,500 Resource Consun \begin{tabular}{lcc} Actual Indirect Costs & \\ \hline Indirect Labor & $240,000 & ($24,000) \\ Depreciation on Tools & $370,000 & $30,000 \\ Rent Expense for Truc & $130,000 & ($20,000) \\ Salaries of Operations & $500,000 & $40,000 \\ Office Rent \& Utilities & $100,000 & $8,000 \\ Office Salaries & $200,000 & $40,000 \\ Landscape Designers & $300,000 & ($20,000) \\ Marketing Expenses & $50,000 & $10,000 \\ Total & $1,890,000 & $64,000 \end{tabular} nption Rates \begin{tabular}{cccc} Travel To Jobs & InstallingLandscapes & MaintainingLandscapes & \multicolumn{1}{c}{ Total } \\ 10% & 10% & 100% \\ 10% & 30% & 40% & 100% \\ 10% & 40% & 30% & 100% \\ 0% & 20% & 30% & 100% \\ 0% & 10% & 10% & 100% \\ 0% & 10% & 10% & 100% \\ 20% & 10% & 0% & 100% \\ & 20% & 0% & 100% \end{tabular} Actual Activity Green Thumb Landscaping: Performance Report under Normal Costing via ABC Using normal costing, compute operating income for each operating department. Then, compute the Indirect Costs Over-Applied / UnderApplied for each operating department and the actual operating income. Does the variance increase or decrease operating income? A decrease in operating income is not preferred and Unfavorable. Thus, we will enter unfavorable variance (such as underapplied overhead) as a negative number bocause it decreases roported operating income. An increase in operating income is preferred and Favorable. Thus, we will enter favorable varlance (such overapplied overhead) as a positive number because it increases reported operating income. Rounded all answers to whole dollars. For New Lawn Installations: 1. Total Overhead Applied under ABC Costing 2. Operating Income under ABC Costing 3. Total Overhead Actual under ABC Costing 4. Over- or Under-Applied Overhead under ABC Costing 5. Operating Income Adjusted Enter profit as a positive number; loss as a negative number. 6. Compute Over-Applied / Under-Applied for Estimating Jobs 7. Compute Over-Applied / Under-Applied for Travel to Jobs For Low Maintenance Lawns: 1. Total Overhead Applied under ABC Costing 2. Operating Income under ABC Costing 3. Total Overhead Actual under ABC Costing 4. Over- or Under-Applied Overhead under ABC Costing 5. Operating Income Adjusted Enter profit as a positive number; loss as a negative number. 6. Compute Over-Applied / Under-Applied for Designing Landscapes 7. Compute Over-Applied / Under-Applied for Maintaining Landscapes For High Maintenance Lawns: 1. Total Overhead Applied under ABC Costing 2. Operating Income under ABC Costing 3. Total Overhead Actual under ABC Costing 4. Over- or Under-Applied Overhead under ABC Costing 5. Operating Income Adjusted Enter profit as a positive number; loss as a negative number. 6. Compute Over-Applied / Under-Applied for Travel to Jobs 7. Compute Over-Applied / Under-Applied for Maintaining Landscapes Green Thumb Landscaping: Performance Report under Normal Costing Using normal costing, compute operating income for each operating department. Then, compute the Indirect Costs Over-Appied / UnderApplied for each operating department and the actual operating income. Does the variance increase or decrease operating income? A decrease in operating income is not preferred and Unfavorable. Thus, we will enter unfavorable variance (such as underapplied overhead) as a negative number because it decreases reported operating income. An increase in operating income is preferred and Favorable. Thus, we will enter favorable variance (such overapplied overhead) as a positive number because it increases reported operating income. Green Thumb Landscaping Budgeted Indirect Costs \begin{tabular}{lc} Indirect Labor & $216,000 \\ Depreciation on Tools \& Equipment & $400,000 \\ Rent Expense for Trucks \& Heavy Eq & $110,000 \\ Salaries of Operations Supervisors & $540,000 \\ Office Rent \& Utilities & $108,000 \\ Office Salaries & $240,000 \\ Landscape Designers Salaries & $280,000 \\ Marketing Expenses & $60,000 \\ \cline { 2 - 2 } Total & $1,954,000 \\ \hline \end{tabular} EstimatingJobsActivityPoolNumberofEstimatesActivityMeasure3,900BudgetedActivity Designing Landscapes Number of Designs 920 Travel To Jobs Number of Jobs 3,000 InstallingLandscapesNumberofNewLandscapes500 MaintainingLandscapesMaintenanceJobsNumberof1,500 Resource Consun \begin{tabular}{lcc} Actual Indirect Costs & \\ \hline Indirect Labor & $240,000 & ($24,000) \\ Depreciation on Tools & $370,000 & $30,000 \\ Rent Expense for Truc & $130,000 & ($20,000) \\ Salaries of Operations & $500,000 & $40,000 \\ Office Rent \& Utilities & $100,000 & $8,000 \\ Office Salaries & $200,000 & $40,000 \\ Landscape Designers & $300,000 & ($20,000) \\ Marketing Expenses & $50,000 & $10,000 \\ Total & $1,890,000 & $64,000 \end{tabular} nption Rates \begin{tabular}{cccc} Travel To Jobs & InstallingLandscapes & MaintainingLandscapes & \multicolumn{1}{c}{ Total } \\ 10% & 10% & 100% \\ 10% & 30% & 40% & 100% \\ 10% & 40% & 30% & 100% \\ 0% & 20% & 30% & 100% \\ 0% & 10% & 10% & 100% \\ 0% & 10% & 10% & 100% \\ 20% & 10% & 0% & 100% \\ & 20% & 0% & 100% \end{tabular} Actual Activity
