Exercise 7-3 Compute Activity Rates [LO7-3] Green Thumb Gardening is a small gar

Question

Exercise 7-3 Compute Activity Rates [LO7-3] Green Thumb Gardening is a small gardening service hat uses activity-based costing to estimate costs for pricing and other purposes. The proprietor of the company believes that costs are driven primarily by the size of customer lawns, the size of customer garden beds, the distance to travel to customers, and the number of customers. In addition, the costs of maintaining garden beds depends on whether the beds are low maintenance beds (mainly ordinary trees and shrubs) or high maintenance beds (mainly flowers and exotic plants). Accordingly, the company uses the five activity cost pools listed below Activity Measure Activity Cost Pool Caring for lawn Caring for garden beds-low maintenance Square feet of low maintenance beds Caring for garden beds-high maintenance Square feet of high maintenance beds Travel to jobs Customer billing and service Square feet of lawn Miles Number of customers The company has already completed its first stage allocations of costs and has summarized its annual costs and activity as follows: Estimated Activity Cost Pool Caring for lawn Caring for garden beds-low maintenance 28,800 24,000 square feet of low maintenance beds Caring for garden beds-high maintenance $49.320 18.000 square feet of high maintenance beds Travel to jobs Customer biling and service Cost $76,200 Expected Activity 180,000 square feet of lawn 4200 15,000 mles $ 8,700 32 customers Required: Compute the activity rate for each of the activity cost pools, (Round your answers to 2 decimal places Caring for lawn per square foot of lawn per square foot of low maintenance beds Caring for garden beds- Hhigh Travel to lobs Customer billing and service Hints References eBook & Resources Hint Check my work esc

Explanation / Answer

Activity Cost Pool Activity Rate caring for Lawn 0.42 Per square foot of Lawn Caring for garden beds for maintenanace 1.20 Per square feet of low maintenance beds Caring for garden beds-high maintenance 2.74 per square feet of high maintenance beds Travel to Jobs 0.28 Per mile Customer billing and service 271.88 Per Customer Activity Cost Pool Activity Rate caring for Lawn =76200/180000 Per square foot of Lawn Caring for garden beds for maintenanace =28800/24000 Per square feet of low maintenance beds Caring for garden beds-high maintenance =49320/18000 per square feet of high maintenance beds Travel to Jobs =4200/15000 Per mile Customer billing and service =8700/32 Per Customer

Related Questions

Navigate

• Browse (All)
• Browse E
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.