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Exercise 7-3 (Algo) Compute Activity Rates [LO7-3] Green Thumb Gardening is a small gardening service using activity-based costing to estimate costs for pricing and other purposes. The owner of the company believes 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 depend 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 Square feet of lawn. Square feet of low-maintenance beds Square feet of high-maintenance beds Miles Number of customers The company completed its first-stage cost allocations and summarized its annual costs and activity as follows: 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. Estimated Overhead Cost $ 81,000 $ 33,600 $ 55,800 $ 4,200 $8,700 Required: Compute the activity rate for each of the activity cost pools. Note: Round your answers to 2 decimal places. Expected Activity 185,000 square feet of lawn 26,000 square feet of low-maintenance beds 20,000 square feet of high-maintenance beds. 17,000 miles 32 customers

Exercise 7-3 (Algo) Compute Activity Rates [LO7-3] Green Thumb Gardening is a small gardening service using activity-based costing to estimate costs for pricing and other purposes. The owner of the company believes 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 depend 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 Square feet of lawn. Square feet of low-maintenance beds Square feet of high-maintenance beds Miles Number of customers The company completed its first-stage cost allocations and summarized its annual costs and activity as follows: 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. Estimated Overhead Cost $ 81,000 $ 33,600 $ 55,800 $ 4,200 $8,700 Required: Compute the activity rate for each of the activity cost pools. Note: Round your answers to 2 decimal places. Expected Activity 185,000 square feet of lawn 26,000 square feet of low-maintenance beds 20,000 square feet of high-maintenance beds. 17,000 miles 32 customers

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Exercise 7-3 (Algo) Compute Activity Rates [LO7-3] Green Thumb Gardening is a small gardening service using activity-based costing to estimate costs for pricing and other purposes. The owner of the company believes 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 depend 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 Cost Pool Caring for lawn Caring for garden beds-low maintenance Caring for garden beds-high maintenance Travel to jobs Customer billing and service Square feet of lawn Square feet of low-maintenance beds Square feet of high-maintenance beds Miles Number of customers The company completed its first-stage cost allocations and summarized its annual costs and activity as follows: Activity Measure Estimated Overhead Cost $ 81,000 $ 33,600 $ 55,800 $ 4,200 $ 8,700 Required: Compute the activity rate for each of the activity cost pools. Note: Round your answers to 2 decimal places. Expected Activity 185,000 square feet of lawn 26,000 square feet of low-maintenance beds 20,000 square feet of high-maintenance beds 17,000 miles 32 customers
Transcribed Image Text:Exercise 7-3 (Algo) Compute Activity Rates [LO7-3] Green Thumb Gardening is a small gardening service using activity-based costing to estimate costs for pricing and other purposes. The owner of the company believes 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 depend 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 Cost Pool Caring for lawn Caring for garden beds-low maintenance Caring for garden beds-high maintenance Travel to jobs Customer billing and service Square feet of lawn Square feet of low-maintenance beds Square feet of high-maintenance beds Miles Number of customers The company completed its first-stage cost allocations and summarized its annual costs and activity as follows: Activity Measure Estimated Overhead Cost $ 81,000 $ 33,600 $ 55,800 $ 4,200 $ 8,700 Required: Compute the activity rate for each of the activity cost pools. Note: Round your answers to 2 decimal places. Expected Activity 185,000 square feet of lawn 26,000 square feet of low-maintenance beds 20,000 square feet of high-maintenance beds 17,000 miles 32 customers
Travel to jobs Customer billing and service Miles Number of customers The company completed its first-stage cost allocations and summarized its annual costs and activity as follows: 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 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 Cost $ 81,000 $ 33,600 $ 55,800 Required: Compute the activity rate for each of the activity cost pools. Note: Round your answers to 2 decimal places. $ 4,200 $ 8,700 Activity Rate Expected Activity 185,000 square feet of lawn 26,000 square feet of low-maintenance beds 20,000 square feet of high-maintenance beds 17,000 miles 32 customers per square feet of lawn per square feet of low-maintenance beds per square feet of high-maintenance beds per mile per customer
Transcribed Image Text:Travel to jobs Customer billing and service Miles Number of customers The company completed its first-stage cost allocations and summarized its annual costs and activity as follows: 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 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 Cost $ 81,000 $ 33,600 $ 55,800 Required: Compute the activity rate for each of the activity cost pools. Note: Round your answers to 2 decimal places. $ 4,200 $ 8,700 Activity Rate Expected Activity 185,000 square feet of lawn 26,000 square feet of low-maintenance beds 20,000 square feet of high-maintenance beds 17,000 miles 32 customers per square feet of lawn per square feet of low-maintenance beds per square feet of high-maintenance beds per mile per customer
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