Green Thumb Gardening is a small gardening service using activity-based costing to estimate costs for pricing and
Question:
Activity Cost Pool | Activity Measure |
---|---|
Caring for lawn | Square feet of lawn |
Caring for garden beds-low maintenance | Square feet of low-maintenance beds |
Caring for garden beds-high maintenance | Square feet of high-maintenance beds |
Travel to jobs | Miles |
Customer billing and service | Number of customers |
The company completed its first-stage cost allocations and summarized its annual costs and activity as follows:
Activity Cost Pool | Estimated Overhead Cost | Expected Activity | |
---|---|---|---|
Caring for lawn | $ 77,000 | 185,000 | square feet of lawn |
Caring for garden beds-low maintenance | $ 29,600 | 25,000 | square feet of low-maintenance beds |
Caring for garden beds-high maintenance | $ 52,630 | 19,000 | square feet of high-maintenance beds |
Travel to jobs | $ 3,800 | 16,000 | miles |
Customer billing and service | $ 7,900 | 20 | customers |
Required:
Compute the activity rate for each of the activity cost pools.
Managerial Accounting
ISBN: 978-0697789938
13th Edition
Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer