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 lawn Square feet of low maintenance beds Square feet of high maintenance beds 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 Caring for lawn Activity Cost Pool Caring for garden beds-low maintenance Customer billing and service Cost $83,400 Expected Activity 165,000 square feet of lawn $ 36,000 Caring for garden beds-high maintenance Travel to jobs $ 48,450 $ 4,200 23,000 square feet of low maintenance beds 17,000 square feet of high maintenance beds 14,000 miles $ 8,700 24 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-low 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 customer

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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 lawn
Square feet of low maintenance beds
Square feet of high maintenance beds
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
Caring for lawn
Activity Cost Pool
Caring for garden beds-low maintenance
Customer billing and service
Cost
$83,400
Expected Activity
165,000 square feet of lawn
$ 36,000
Caring for garden beds-high maintenance
Travel to jobs
$ 48,450
$ 4,200
23,000 square feet of low maintenance beds
17,000 square feet of high maintenance beds
14,000 miles
$ 8,700
24 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-low 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 customer
Transcribed Image Text: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 lawn Square feet of low maintenance beds Square feet of high maintenance beds 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 Caring for lawn Activity Cost Pool Caring for garden beds-low maintenance Customer billing and service Cost $83,400 Expected Activity 165,000 square feet of lawn $ 36,000 Caring for garden beds-high maintenance Travel to jobs $ 48,450 $ 4,200 23,000 square feet of low maintenance beds 17,000 square feet of high maintenance beds 14,000 miles $ 8,700 24 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-low 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 customer
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