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-loM maintenance Caring for garden beds-high maintenance Travel to jobs Customer billing and service Cost Expected Activity $81,000 17e, 000 square feet of lawn $33, 600 $42, 880 $ 3,800 $ 7,900 22, 000 square feet of low maintenance beds 16, 000 square feet of high maintenance beds 13,000 miles 28 custoners Required: Compute the activity rate for each of the activity cost pools. (Round your 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 Travel to jobs per square ft of high maintenance beds per mile Customer billing and service 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-loM maintenance Caring for garden beds-high maintenance Travel to jobs Customer billing and service Cost Expected Activity $81,000 17e, 000 square feet of lawn $33, 600 $42, 880 $ 3,800 $ 7,900 22, 000 square feet of low maintenance beds 16, 000 square feet of high maintenance beds 13,000 miles 28 custoners Required: Compute the activity rate for each of the activity cost pools. (Round your 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 Travel to jobs per square ft of high maintenance beds per mile Customer billing and service per customer
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Solution Activity cost pool Activity rate Formulas Caring for lawn 048 per s... View the full answer
Related Book For
Managerial Accounting
ISBN: 978-0697789938
13th Edition
Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer
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