Mindy Landscaping has enjoyed profits for many years, but new competition has cut service revenue by as much as 30%. As a result, the company wants to better understand its costs. It decides to prepare an activity-based cost analysis, including an estimate of the average cost of both general landscaping services and custom design landscaping services. The company's three cost centers are as follow. Cost center Cost Professional salaries RM900.000 Customer supplies 350.000 Building cost 400,000 The company's cost drivers are as follow. Cost driver Professional hours Number of customers Square feet Driver Quantity 15.000 1,000 2.000 The two main landscaping units and their related data follow. Service Hours Square feet Customers General landscaping 2,500 500 400 Custom design landscaping 7,500 1,000 100 Required: (a) Compute the cost per cost driver for each of the three cost centers. (3 marks) (CLO3:PLO2:C3) (b) Use the results from part (i) to allocate costs from each of the three cost centers to both landscaping and the custom design landscaping units. (6 marks) (CLO3:PLO2:C3) ACC75210/June2020 Page 2 of 6 (c) Compute total cost and average cost per customer for both general landscaping and the custom design landscaping units. (2 marks) (CLO3:PLO2:C3) (d) Discuss how activity-based costing systems can provide more accurate product costs than traditional cost systems. (14 marks) (CLO3:PLO2:04) Mindy Landscaping has enjoyed profits for many years, but new competition has cut service revenue by as much as 30%. As a result, the company wants to better understand its costs. It decides to prepare an activity-based cost analysis, including an estimate of the average cost of both general landscaping services and custom design landscaping services. The company's three cost centers are as follow. Cost center Cost Professional salaries RM900.000 Customer supplies 350.000 Building cost 400,000 The company's cost drivers are as follow. Cost driver Professional hours Number of customers Square feet Driver Quantity 15.000 1,000 2.000 The two main landscaping units and their related data follow. Service Hours Square feet Customers General landscaping 2,500 500 400 Custom design landscaping 7,500 1,000 100 Required: (a) Compute the cost per cost driver for each of the three cost centers. (3 marks) (CLO3:PLO2:C3) (b) Use the results from part (i) to allocate costs from each of the three cost centers to both landscaping and the custom design landscaping units. (6 marks) (CLO3:PLO2:C3) ACC75210/June2020 Page 2 of 6 (c) Compute total cost and average cost per customer for both general landscaping and the custom design landscaping units. (2 marks) (CLO3:PLO2:C3) (d) Discuss how activity-based costing systems can provide more accurate product costs than traditional cost systems. (14 marks) (CLO3:PLO2:04)