Mr. Beridon received your requests for information and returned data which you have compiled in an Microsoft Excel spreadsheet (see document template).

He also said, "We grow sod and trees at Jeemp Farms. We sell the sod mainly to home builders in the area, although we sell to some individuals who are purchasing square footages to re-sod their yard. Many home builders will purchase to sod an entire subdivision.

They then may come back to us to purchase trees for the yards. It really is a package deal. For builders like that, we are a one-stop-shop. In most cases, however, we sell the trees to orchards and some individuals.

The purchaser is responsible for all shipping costs related to their product." "Our production process is different for each product. For sod, we plant the seed, irrigate, cut, and roll the sod and then transport it.

For the trees, we plant the root stock, graft the tree, water until a particular maturity and then dig it up and sell it. We inspect the plants as needed to make sure we are producing a quality product that is disease-free." "We have delayed purchasing some machinery that reduces time for the planting of the trees because it is a large up-front cost and we don't want to have a huge outlay of cash if our profits keep going down."

"The grass does not require as much irrigation as the trees, as it is at a lower elevation than the tree acres and is closer to the creek; it gets a lot of the run off." "Historically, we have always been able to sell everything we produce. Hopefully, that will continue since Houston is expanding rapidly."

Compute the product costs for the sod and trees under traditional and ABC costing using the Microsoft Excel spreadsheet.

September October November December TOTA 1646281,556,851 62081 62,790132715 907 produced and sold of each product St. Augustine Sod in sq feet 8,908 897 956 667 457 867 680 456 456 987 789 Texas Pecan Trees Traditional Costing Method Basic Information Sod Trees 12.99 $ 0.38 0.01 Selling Price Per Unit Direct Materials Per Unit 0.99 Direct Labor Per Unit 0.09 2.00 $ Direct Labor Hours Per Unit 0.2 0.009 Estimated Annual Production and Sales units Estimated Overhead (last year's numbers Planting 47,000 19,000 Irrigation 19,046 Product Support Harvesting 21,567 4,564 6,754 Property Taxes 117,931 TOTAL Estimated Total Direct Labor Hours DO NOT ROUND Predetermined Overhead Rate DO NOT ROUND Traditional Costi Sales Direct Materials Direct Labor Manufacturing Overhead Product Margin per unit ABC Costing Method % of overhead costs by product St. Augustine Sod in sq feet Texas Pecan Trees year old trees Planting Product Support Harvesting Irrigating 20% Property TaxesInspections 10% 20% 7% 40% 40% 93% 80% 80% 60% 60% 90% Overhead costs by product St. Augustine Sod in sq feet Texas Pecan Trees year old trees Planting Product Support TOTALS Irrigating Harvesting Property Taxes Inspections Overhead Planting 47,000 Irrigation Product Support 19,000 19,046 Harvesting 21,567 4,564 6,754 117,931 Property Taxes TOTAL ABC Costin Sod Trees Sales Direct Materials Direct Labor Manufacturing Overhead Product Margin per unit Planting 47,000 Irrigation Product Support Harvesting Inspections Property Taxes 19,000 19,046 21,567 4,564 6,754 TOTAL 117,931