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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 belleves 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 malntalning garden beds depends on whether the beds are low malntenance beds (malnly ordinary trees and shrubs) or high malntenance beds (malnly 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 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 Expected Activity S 72,000 $ 26,400 $ 41,400 $ 3,250 $ 8,750 15e, eee square feet of lawn 20, e00 square feet of low maintenance beds 15,e00 square feet of high maintenance beds 12,500 miles 25 customers Required: Compute the activity rate for each of the activity cost pools. (Round your answers to 2 decimal places except customer bling 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 Activity Rate per square feet of lawn per square feet of low maintenance beds per square feet of high maintenance beds per mile per customer

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 belleves 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 malntalning garden beds depends on whether the beds are low malntenance beds (malnly ordinary trees and shrubs) or high malntenance beds (malnly 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 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 Expected Activity S 72,000 $ 26,400 $ 41,400 $ 3,250 $ 8,750 15e, eee square feet of lawn 20, e00 square feet of low maintenance beds 15,e00 square feet of high maintenance beds 12,500 miles 25 customers Required: Compute the activity rate for each of the activity cost pools. (Round your answers to 2 decimal places except customer bling 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 Activity Rate per square feet of lawn per square feet of low maintenance beds per square feet of high maintenance beds per mile per customer

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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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 malntalning garden beds depends on whether the beds are low malntenance beds (malnly ordinary trees and shrubs) or high malntenance beds (malnly 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 Activity cost Pool Caring for lawn Caring for garden beds-1ow maintenance Caring for garden beds-high maintenance Travel to jobs Customer billing and service Cost Expected Activity $ 72,000 $ 26,400 $ 41,400 $ 3,250 $ 8,750 150, e00 square feet of 1lawn 20,000 square feet of low maintenance beds 15,e00 square feet of high maintenance beds 12,500 miles 25 customers Requlred: Compute the activity rate for each of the activity cost pools. (Round your answers to 2 decimal places except customer blling and service.) Activity Cost Pool Caring for lawn Activity Rate per square feet of lawn Caring for garden beds-low maintenance per square feet of low maintenance beds Caring for garden beds-high maintenance per square feet of high maintenance beds Travel to jobs Customer billing and service 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 malntalning garden beds depends on whether the beds are low malntenance beds (malnly ordinary trees and shrubs) or high malntenance beds (malnly 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 Activity cost Pool Caring for lawn Caring for garden beds-1ow maintenance Caring for garden beds-high maintenance Travel to jobs Customer billing and service Cost Expected Activity $ 72,000 $ 26,400 $ 41,400 $ 3,250 $ 8,750 150, e00 square feet of 1lawn 20,000 square feet of low maintenance beds 15,e00 square feet of high maintenance beds 12,500 miles 25 customers Requlred: Compute the activity rate for each of the activity cost pools. (Round your answers to 2 decimal places except customer blling and service.) Activity Cost Pool Caring for lawn Activity Rate per square feet of lawn Caring for garden beds-low maintenance per square feet of low maintenance beds Caring for garden beds-high maintenance per square feet of high maintenance beds Travel to jobs Customer billing and service per mile per customer
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