80.2K

Verified Solution

Link Copied!

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	Square feet of lawn
Caring for garden bedslow maintenance	Square feet of low maintenance beds
Caring for garden bedshigh maintenance	Square feet of high maintenance beds
Travel to jobs	Miles
Customer billing and service	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	Estimated Overhead Cost	Expected Activity
Caring for lawn	$ 78,600	180,000	square feet of lawn
Caring for garden bedslow maintenance	$ 31,200	25,000	square feet of low maintenance beds
Caring for garden bedshigh maintenance	$ 53,770	19,000	square feet of high maintenance beds
Travel to jobs	$ 3,400	16,000	miles
Customer billing and service	$ 7,100	26	customers

Required:

Compute the activity rate for each of the activity cost pools. (Round your answers to 2 decimal places.)

\begin{tabular}{|l|l|l|} \hline Activity Cost Pool & Activity Rate & \\ \hline Caring for lawn & & per square feet of lawn \\ \hline Caring for garden beds-low maintenance & & per square feet of low maintenance beds \\ \hline Caring for garden beds-high maintenance & & per square feet of high maintenance beds \\ \hline Travel to jobs & & per mile \\ \hline Customer billing and service & & per customer \\ \hline \end{tabular}

Answer & Explanation Solved by verified expert

See Answer