Home Garden USA provides lawn care and landscaping services to commercial clients. Home Garden USA uses activity-based costing to bid on jobs and to evaluate their profitability. Home Garden USA reports the following budgeted annual costs:

Wages and salaries	$500,000
Depreciation	64,000
Supplies	85,000
Other overhead	86,000
Total overhead costs	$735,000

John Carter, controller of Home Garden USA, has established four activity cost pools and the following budgeted activity for each cost pool:

Activity Cost Pool	Activity Measure	Total Activity for the Year
Estimating jobs	Number of job estimates	275 estimates
Lawn care	Number of direct labor-hours	5,000 direct labor-hours
Landscape design	Number of design hours	600 design hours
Other	Facility-sustaining costs that are not allocated to jobs	Not applicable

Carter estimates that Home Garden USA's costs are distributed to the activity-cost pools as follows:

	Estimating Jobs	Lawn Care	Landscape Design	Other	Total
Wages and salaries	5%	75%	10%	10%	100%
Depreciation	10%	65%	5%	20%	100%
Supplies	0%	100%	0%	0%	100%
Other overhead	25%	50%	15%	10%	100%

Vista Office Park, a new development in a nearby community, has contacted Home Garden USA to provide an estimate on landscape design and annual lawn maintenance. The job is estimated to require a single landscape design requiring 40 design hours in total and 275 direct labor-hours annually. Home Garden USA has a policy of pricing estimates at 150% of cost.

Requirement 1. Allocate Home Garden USA's costs to the activity-cost pools and determine the activity rate for each pool. Start by allocating Home Garden USA's costs to the activity-cost pools. (Enter zero in any cell if no amount should be allocated to the activity-cost pool.)

	Estimating Jobs	Lawn Care	Landscape Design	Other	Total
Wages and salaries
Depreciation
Supplies
Other Overhead
Total

Now select the formula used to determine the cost driver rats, then calculate the activity for each pool. (Abbreviation used: DLH = Direct labor-hour. Round the answers to the nearest cent, "X.XX".)

	Cost	/	Total quantity of cost driver	=	Cost driver rate
Estimating jobs	$	/		=	$	Per estimate
Lawn care	$	/		=	$	Per DLH
Landscape design	$	/		=	$	Per design hour

Requirement 2. Estimate total cost for the Shasta Office Park job. How much would Home Landscape USA bid to perform the job?

Calculate the total costs and bid amount Home Landscape USA would charge Shasta Office Park. (Round the answers to the nearest cent, "X.XX".)

Estimating jobs	$
Lawn care	$
Landscape design	$
Total costs	$
Markup multiplier	%
Bid estimate	$

Requirement 3. Home Landscape USA does 34 landscape designs for its customers each year. Estimate the total cost for the Shasta Office park job if Home Landscape USA allocated costs of the Landscape Design activity based on the number of landscape designs rather than the number of landscape design-hours. How much would Home Landscape USA bid to perform the job? Which cost driver do you prefer for the Landscape Design activity? Why?

How much would Home Landscape USA bid to perform the job?

Estimating Jobs	$
Lawn care	$
Landscape design	$
Total Costs	$
Markup multiplier	%
Bid estimate	$