Complete the first stage allocations of costs to activity cost pools as illustrated in Exhibit 7–6. Required: 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 EXERCISE 7–3 Compute Activity Rates LO7-3 high main- on whether the beds are low maintenance beds (mainly ordinary trees and shrubs) or tenance beds (mainly flowers and exotic plants). Accordingly, the company uses the five activity cost pools listed below: Activity Measure Activity Cost Pool Square feet of lawn Square feet of low maintenance beds Square feet of high maintenance beds Caring for lawn ... Caring for garden beds-low maintenance Caring for garden beds-high maintenance Travel to jobs ...... Customer billing and service Miles Number of customers 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 Cost Expected Activity Caring for lawn Caring for garden beds-low $72,000 150,000 square feet of lawn maintenance $26,400 20,000 square feet of low maintenance beds Caring for garden beds-high maintenance $41,400 $3,250 $8,750 15,000 square feet of high maintenance beds 12,500 miles Travel to jobs... Customer billing and service... 25 customers

Q: Discuss the advantages of activity-based costing.

A: Activity Based Costing:   The approach of activity based costing keeps the record of resources…

Q: Explain how the activity resource usage model is used in assessing relevancy.

A: Decision making is an important component of every single business. The end results of the…

Q: In the blank next to the following terms, place the letter A through D corresponding to the best…

A: Cost:   It is the economic value of resources incurred by a firm to manufacture a product or render…

Q: how activity based costing has been discovered?

A: Activity-based costing, often known as ABC, is a way of allocating overhead and indirect expenses to…

Q: Which of the following is the proper sequence of events in an activity-based costing system? A.…

A: Activity-Based Costing or ABC is a managerial accounting method that assigns certain indirect…

Q: 1.An activity that has a direct cause-effect relationship with the resources consumed is a(n) Group…

A: In activity based costing the cost are apportioned based on the respective cost drivers

Q: Both the equivalent units schedules and the physical flow are prerequisites to calculating the…

A: The question is related to Process Costing. There are two methods of equivalent units  1. FIFO  2.…

Q: Discuss the disadvantages of activity-based costing.

A: Activity Based Costing: The approach of activity based costing keeps the record of resources usage…

Q: Define period costs.

A: Period costs are not joined to items and the company does not need for Offer on Sale of items and…

Q: How many cost pools are in an activity-based costing system?

A: Activity-Based Costing: Activity-Based Costing refers to the allocation of the factory overheads…

Q: Describe at a high level the various cost categories and expenditures.

A: Expenditures refer to money spent on goods, services, or investments. It is the amount of money used…

Process Costing

Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.  

Job Costing

Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.

ABC Costing

Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.