Green Thumb Gardening is a small gardening service that uses activity-based costing to estimate costs for...
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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 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 Cost $ 88,200 $ 40,800 Caring for garden beds-high maintenance $ 65,520 Travel to jobs $ 4,200 $ 8,700 Customer billing and service Required: Compute the activity rate for each of the activity cost pools. Note: Round your answers to 2 decimal places. 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 Expected Activity 170,000 square feet of lawn 30,000 square feet of low maintenance beds 24,000 square feet of high maintenance beds 21,000 miles Activity Rate per square feet of lawn 22 customers 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 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 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 Cost $ 88,200 $ 40,800 Caring for garden beds-high maintenance $ 65,520 Travel to jobs $ 4,200 $ 8,700 Customer billing and service Required: Compute the activity rate for each of the activity cost pools. Note: Round your answers to 2 decimal places. 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 Expected Activity 170,000 square feet of lawn 30,000 square feet of low maintenance beds 24,000 square feet of high maintenance beds 21,000 miles Activity Rate per square feet of lawn 22 customers per square feet of low maintenance beds per square feet of high maintenance beds per mile per customer
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Related Book For
Managerial Accounting
ISBN: 978-0697789938
13th Edition
Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer
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