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 Activity Measure Square feet of lawn Square feet of low maintenance beds Square feet of high maintenance beds Miles Number of customers 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: 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 Estimated Overhead Cost $ 83, 400 $ 36,000 $ 50,040 $ 5,000 $ 10,300 Expected Activity 165,000 square feet of lawn 24,000 square feet of low hiaintenance beds 18,000 square feet of high maintenance beds 15,000 miles 24 customiers Required: Compute the activity rate for each of the activity cost pools. (Round youn answers to 2 decimal places.) Activity Cost Pool Activity Rate Caring for lawn per square ft of Jawn Caring for garden beds-low maintenance per square ft of low maintenance beds Caring for garden beds-high maintenance per square ft of high maintenande beds Travel to jobs per mile Customer billing and service per customer
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 Activity Measure Square feet of lawn Square feet of low maintenance beds Square feet of high maintenance beds Miles Number of customers 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: 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 Estimated Overhead Cost $ 83, 400 $ 36,000 $ 50,040 $ 5,000 $ 10,300 Expected Activity 165,000 square feet of lawn 24,000 square feet of low hiaintenance beds 18,000 square feet of high maintenance beds 15,000 miles 24 customiers Required: Compute the activity rate for each of the activity cost pools. (Round youn answers to 2 decimal places.) Activity Cost Pool Activity Rate Caring for lawn per square ft of Jawn Caring for garden beds-low maintenance per square ft of low maintenance beds Caring for garden beds-high maintenance per square ft of high maintenande beds Travel to jobs per mile Customer billing and service per customer
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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Transcribed Image Text: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 imaintenance 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:
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
Estimated
Overhead
Cost
$ 83,400
$ 36,000
$ 50,040
$ 5,000
$ 10,300
Expected Activity
165,000 square feet of lawn
24,000 square feet of low hiaintenance beds
18,000 squane feet of high maintenance beds
15,000 miles
24 customers
Required:
Compute the activity rate for each of the activity cost pools. (Round youn answers to 2 decimal places.)
Activity Cost Pool
Activity Rate
Caring for lawn
per square ft of lawn
Caring for garden beds-low maintenance
per square ft of low maintenance beds
Caring for garden beds-high maintenance
per square ft of high maintenange beds
Travel to jobs
per mile
Customer billing and service
per customer
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