Green Thumb Gardening is a small gardening service using activity-based costing to estimate costs for...
60.1K
Verified Solution
Link Copied!
Question
Accounting
Green Thumb Gardening is a small gardening service using activity-based costing to estimate costs for pricing and other purposes. The owner of the company believes 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 depend 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 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
$ 77,800
165,000
square feet of lawn
Caring for garden bedslow maintenance
$ 30,400
27,000
square feet of low-maintenance beds
Caring for garden bedshigh maintenance
$ 59,010
21,000
square feet of high-maintenance beds
Travel to jobs
$ 4,000
18,000
miles
Customer billing and service
$ 8,300
28
customers
Required:
Compute the activity rate for each of the activity cost pools.
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!