Johnson Gardening Company provides lawn and garden services to its clients. The company uses an activity-based costing system for its overhead costs. The company has provided the following data from its activity-based costing system.

Activity Cost PoolTotal CostTotal Activity

Mowing/trimming$160,50015,250 hours

Job support28,5751,700 jobs

Client support6,750285 clients

Other100,000Not applicable

Total$260,825

The "Other" activity cost pool consists of the costs of idle capacity and organization-sustaining costs.

One particular client, the Guzman family, requested 24 jobs during the year that required a total of 175 hours of gardening. For these services, the client was charged $4,000.

Required:

a. Compute the activity rates for the activity cost pools.Round off all calculations for the nearest whole cent.

b. Using the activity-based costing system, compute the customer margin for the Guzman family. Round off all calculations to the nearest whole cent.

c. Assume the company decides instead to use a traditional costing system in which ALL costs are allocated to customers on the basis of mowing/trimming hours. Compute the margin for the Guzman family. Round off all calculations to the nearest whole cent.