Green and Gorgeous is a landscaping firm that offers a wide variety of services. The firm puts in hardscaping (retaining walls, stepping stone walks and even driveways), designs, plants and maintains whatever growing things the customer wants, and installs sprinkler systems. The firm advertises that no job is too small or too large. It has completed jobs for new golf courses, planters outside restaurants and many different types and styles of residential properties. Recently, the firm has been experiencing difficulty securing some of the larger jobs. While the smaller jobs are fine, the real money can be made on the big jobs. The owner has decided that a better costing system might help the firm develop more realistic costs and enable it to come in with slightly lower estimates. For this reason, an ABC system has been designed and will be implemented starting on May 1. The new system has four cost pools. The first cost pool is design. It includes all the costs to work with the client to determine exactly what will be built, what types of plants will be added and where and what type of maintenance contract is desired. The driver is designer hours. The second cost pool is hardscaping and includes all the materials and labour required to build the items the customer orders. The driver for this pool is square metres of the structure(s). The third cost pool is sprinkler systems. It includes all the materials and labour to install, test and maintain the sprinkler system. The driver is linear metres. The final cost pool is greenscaping, which includes acquisition of any plants the customer has chosen, including lawns. It also includes the cost to plant and maintain the plants for the first two years. After that, the customer can choose to sign a new contract with G & G or look elsewhere for this service. The driver for the plant cost pool is the cost of the plants to be included in the contract. The cost of the plants themselves is considered a direct cost. Estimates that were made at the beginning of the 2021 season are: Plant cost $1,965,000 Design cost 432,000 Hardscaping cost 2,450,000 Sprinkler system cost 543,000 Greenscaping cost 953,400 Total expected jobs 354 Average square metres of hardscaping 22 Percentage of jobs that include sprinklers 60% Average linear feet per sprinkler system 50 Total designer hours 2,740 On June 20, Gnu University contacted G & G about doing the landscaping for its new state of the art campus. The job will include vine-covered walkways, blossoming trees surrounded by flower gardens and retaining walls and a statue of the founder, Gerald Gnu. The designers will require 39 hours to get everything properly set-up. Hardscaping will require 130 square meters. There will be no sprinkler system as all plants will be chosen to survive in the local climate without additional watering. The estimate for the cost of the plants is $10,540. Compute the rates for the ABC system. Document each computation and label each rate carefully. Compute the estimated cost of the Gnu U jo
Problem 2.
Green and Gorgeous is a landscaping firm that offers a wide variety of services. The firm puts in hardscaping (retaining walls, stepping stone walks and even driveways), designs, plants and maintains whatever growing things the customer wants, and installs sprinkler systems. The firm advertises that no job is too small or too large. It has completed jobs for new golf courses, planters outside restaurants and many different types and styles of residential properties.
Recently, the firm has been experiencing difficulty securing some of the larger jobs. While the smaller jobs are fine, the real money can be made on the big jobs. The owner has decided that a better costing system might help the firm develop more realistic costs and enable it to come in with slightly lower estimates. For this reason, an ABC system has been designed and will be implemented starting on May 1.
The new system has four cost pools. The first cost pool is design. It includes all the costs to work with the client to determine exactly what will be built, what types of plants will be added and where and what type of maintenance contract is desired. The driver is designer hours. The second cost pool is hardscaping and includes all the materials and labour required to build the items the customer orders. The driver for this pool is square metres of the structure(s). The third cost pool is sprinkler systems. It includes all the materials and labour to install, test and maintain the sprinkler system. The driver is linear metres. The final cost pool is greenscaping, which includes acquisition of any plants the customer has chosen, including lawns. It also includes the cost to plant and maintain the plants for the first two years. After that, the customer can choose to sign a new contract with G & G or look elsewhere for this service. The driver for the plant cost pool is the cost of the plants to be included in the contract. The cost of the plants themselves is considered a direct cost.
Estimates that were made at the beginning of the 2021 season are:
| Plant cost | $1,965,000 |
| Design cost | 432,000 |
| Hardscaping cost | 2,450,000 |
| Sprinkler system cost | 543,000 |
| Greenscaping cost | 953,400 |
| Total expected jobs | 354 |
| Average square metres of hardscaping | 22 |
| Percentage of jobs that include sprinklers | 60% |
| Average linear feet per sprinkler system | 50 |
| Total designer hours | 2,740 |
On June 20, Gnu University contacted G & G about doing the landscaping for its new state of the art campus. The job will include vine-covered walkways, blossoming trees surrounded by flower gardens and retaining walls and a statue of the founder, Gerald Gnu. The designers will require 39 hours to get everything properly set-up. Hardscaping will require 130 square meters. There will be no sprinkler system as all plants will be chosen to survive in the local climate without additional watering. The estimate for the cost of the plants is $10,540.
- Compute the rates for the ABC system. Document each computation and label each rate carefully.
- Compute the estimated cost of the Gnu U job.
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