Green Thumb Gardening is a small gardening service that uses activity-based cost
ID: 342160 • Letter: G
Question
Green Thumb Gardening is a small gardening service that 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 Cost Pool Caring for lawn Caring for garden beds-low maintenance Caring for garden beds-high maintenance Travel to jobs Customer billing and service Activity Measure Square feet of 1awn Square feet of low maintenance beds Square feet of high mainten Miles Number of customers ance beds The company already has completed its first stage allocations of costs and has summarized its annual costs and activity as follows Estimated Overhead Activity Cost Pool Caring for lawn Caring for garden beds-low maintenance Caring for garden beds-high maintenance Travel to jobs Customer billing and service Expected Activity Cost s 81,800 160,000 34,400 25,000 square feet of low maintenance beds 50,540 19,000 square feet of high maintenance beds $ 4,800 16,000 miles square feet of lawn $ 9,900 30 customers Required: Compute the activity rate for each of the activity cost pools. (Round your answers to 2 decimal places.) Activity Cost Pool Caring for lawn Caring for garden beds ow maintenance Caring for garden beds-high maintenance Travel to jobs Customer billing and service Activity Rate per square ft of lawn per square ft of low maintenance beds per square ft of high maintenance beds per mile per customerExplanation / Answer
the following is the required table along with workings:
Activity cost pool Activity rate Caring for lawn ($81,800 / 160,000 sq feet) $0.51 per square ft of lawn Caring for garden beds - low maintenance ($34,400 / 25,000) $1.38 per sq ft of low maintenance beds caring for garden beds- high maintenance (50,540 / 19,000) $2.66 per square ft of high maintenance beds Travel to jobs ($4,800 /16,000) $0.30 per mile Customer billing and service ($9900 / 30 customer) $330 per customerRelated Questions
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