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:

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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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 has already 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 $ 40,800
Caring for garden beds-high maintenance $ 47,090
Travel to jobs
Customer billing and service
Expected Activity
190,000 square feet of lawn
23,000 square feet of low maintenance beds
17,000 square feet of high maintenance beds
Cost
$ 88,200
$ 5,000
$ 10,300
14,000 miles
34 customers
Required:
Compute the activity rate for each of the activity cost pools.
Transcribed Image Text: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 has already 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 $ 40,800 Caring for garden beds-high maintenance $ 47,090 Travel to jobs Customer billing and service Expected Activity 190,000 square feet of lawn 23,000 square feet of low maintenance beds 17,000 square feet of high maintenance beds Cost $ 88,200 $ 5,000 $ 10,300 14,000 miles 34 customers Required: Compute the activity rate for each of the activity cost pools.
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