**Green Thumb Gardening Overview**Green Thumb Gardening is a small gardening service employing activity-based costing to estimate costs for pricing and other purposes. The proprietor believes costs are driven by factors such as the size of customer lawns, the size of customer garden beds, travel distance to customers, and the number of customers. Costs for garden bed maintenance vary based on whether beds are low maintenance (mainly ordinary trees and shrubs) or high maintenance (mainly flowers and exotic plants).**Activity Cost Pools and Measures**The company uses five activity cost pools:1. **Caring for Lawn** - **Activity Measure**: Square feet of lawn2. **Caring for Garden Beds – Low Maintenance** - **Activity Measure**: Square feet of low maintenance beds3. **Caring for Garden Beds – High Maintenance** - **Activity Measure**: Square feet of high maintenance beds4. **Travel to Jobs** - **Activity Measure**: Miles5. **Customer Billing and Service** - **Activity Measure**: Number of customers**Cost Summary and Expected Activity**The first stage allocation of costs has been completed with the following results:| Activity Cost Pool | Estimated Overhead Cost | Expected Activity ||---------------------------------------------|-------------------------|----------------------------------|| Caring for Lawn | $81,800 | 185,000 square feet of lawn || Caring for Garden Beds – Low Maintenance | $34,400 | 26,000 square feet of beds || Caring for Garden Beds – High Maintenance | $56,200 | 20,000 square feet of beds || Travel to Jobs | $3,600 | 17,000 miles || Customer Billing and Service | $7,500 | 22 customers |**Required: Compute Activity Rates**The task is to compute the activity rate for each cost pool, ensuring the results are rounded to two decimal places.| Activity Cost Pool | Activity Rate ||---------------------------------------------|-------------------------------------------------|| Caring for Lawn | per square foot of lawn || Caring for Garden Beds – Low Maintenance | per square foot of low maintenance beds || Caring for Garden Beds – High Maintenance | per square foot of high maintenance beds || Travel to Jobs | per mile || Customer Billing and Service | per customer |Calculations should be done by dividing the estimated

The activity-based costing (ABC) is used to identify, describe, assign costs to, and report on…

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 Cost Pool Caring for lawn Caring for garden beds-low maintenance Caring for garden beds-high maintenance Travel to jobs Customer billing and service The company already has completed its first stage allocations of costs and has summarized its annual costs and activity as follows: Estimated Overhead Square feet of lawn 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 low maintenance beds. Square feet of high maintenance beds. Miles Number of customers Cost $ 81,800 $ 34,400 $ 56,200 $3,600 $7,500 Activity Rate Expected Activity Required: Compute the activity rate for each of the activity cost pools. (Round your answers to 2 decimal places.) 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 22 customers per square feet of lawn per square feet of low maintenance beds per square feet of high maintenance beds mile per per customer

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q