LXINUIT 1-0. EXERCISE 7-3 Compute Activity Rates [LO7-3] 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 Activity Measure Caring for lawn Caring for garden beds-low maintenance Caring for garden beds-high maintenance Travel to jobs .. Customer billing and service . 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 Cost Expected Activity $72,000 150,000 square feet of lawn Caring for lawn Caring for garden beds-low maintenance .. $26,400 20,000 square feet of low maintenance beds Caring for garden beds-high $41,400 $3,250 $8,750 15,000 square feet of high maintenance beds 12,500 miles maintenance Travel to jobs ... Customer billing and service... 25 customers
LXINUIT 1-0. EXERCISE 7-3 Compute Activity Rates [LO7-3] 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 Activity Measure Caring for lawn Caring for garden beds-low maintenance Caring for garden beds-high maintenance Travel to jobs .. Customer billing and service . 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 Cost Expected Activity $72,000 150,000 square feet of lawn Caring for lawn Caring for garden beds-low maintenance .. $26,400 20,000 square feet of low maintenance beds Caring for garden beds-high $41,400 $3,250 $8,750 15,000 square feet of high maintenance beds 12,500 miles maintenance Travel to jobs ... Customer billing and service... 25 customers
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
7-3
![LXINUIT 1-0.
EXERCISE 7-3 Compute Activity Rates [LO7-3]
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
Activity Measure
Caring for lawn
Caring for garden beds-low maintenance
Caring for garden beds-high maintenance
Travel to jobs ..
Customer billing and service .
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
Cost
Expected Activity
$72,000
150,000 square feet of lawn
Caring for lawn
Caring for garden beds-low
maintenance ..
$26,400
20,000 square feet of low maintenance beds
Caring for garden beds-high
$41,400
$3,250
$8,750
15,000 square feet of high maintenance beds
12,500 miles
maintenance
Travel to jobs ...
Customer billing and service...
25 customers](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F85e39e9b-3b6a-4fb6-8406-b63a567ff03b%2Fb7564e11-0c94-4dab-ab8d-14271a497504%2Fpls2dqm.jpeg&w=3840&q=75)
Transcribed Image Text:LXINUIT 1-0.
EXERCISE 7-3 Compute Activity Rates [LO7-3]
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
Activity Measure
Caring for lawn
Caring for garden beds-low maintenance
Caring for garden beds-high maintenance
Travel to jobs ..
Customer billing and service .
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
Cost
Expected Activity
$72,000
150,000 square feet of lawn
Caring for lawn
Caring for garden beds-low
maintenance ..
$26,400
20,000 square feet of low maintenance beds
Caring for garden beds-high
$41,400
$3,250
$8,750
15,000 square feet of high maintenance beds
12,500 miles
maintenance
Travel to jobs ...
Customer billing and service...
25 customers
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education