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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 The company already has completed its first stage allocations of costs and has summarized its annual costs and activity as follows: 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 Activity Cost Pool Caring for lawn Caring for garden beds-low maintenance Caring for garden beds-high maintenance Estimated Overhead Cost $ 77,000 $ 29,600 $ 58,960 54,800 $ 9,900 Required: Compute the activity rate for each of the activity cost pools. Note: Round your answers to 2 decimal places. Activity Rate Expected Activity 165,000 square feet of lawn. 28,000 square feet of low maintenance beds 22,000 square feet of high maintenance beds 19,000 miles 28 customers per square feet of lawn per square feet of low maintenance beds per square feet of high maintenance beds

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 The company already has completed its first stage allocations of costs and has summarized its annual costs and activity as follows: 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 Activity Cost Pool Caring for lawn Caring for garden beds-low maintenance Caring for garden beds-high maintenance Estimated Overhead Cost $ 77,000 $ 29,600 $ 58,960 54,800 $ 9,900 Required: Compute the activity rate for each of the activity cost pools. Note: Round your answers to 2 decimal places. Activity Rate Expected Activity 165,000 square feet of lawn. 28,000 square feet of low maintenance beds 22,000 square feet of high maintenance beds 19,000 miles 28 customers per square feet of lawn per square feet of low maintenance beds per square feet of high maintenance beds

Principles of Accounting Volume 2
Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter10: Short-term Decision Making
Section: Chapter Questions
Problem 3Q: Felipes Restaurant and Pie Shop needs help defining the costs for his business. He also wants to...
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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 The company already has completed its first stage allocations of costs and has summarized its annual costs and activity as follows: 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 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 Estimated Overhead Cost $77,000 $ 29,600 $ 58,960 Required: Compute the activity rate for each of the activity cost pools. Note: Round your answers to 2 decimal places. $ 4,800 $ 9,900 Activity Rate Expected Activity 165,000 square feet of lawn 28,000 square feet of low maintenance beds 22,000 square feet of high maintenance beds 19,000 miles 28 customers per square feet of lawn per square feet of low maintenance beds per square feet of high maintenance beds per mile per customer
Transcribed Image Text: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 The company already has completed its first stage allocations of costs and has summarized its annual costs and activity as follows: 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 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 Estimated Overhead Cost $77,000 $ 29,600 $ 58,960 Required: Compute the activity rate for each of the activity cost pools. Note: Round your answers to 2 decimal places. $ 4,800 $ 9,900 Activity Rate Expected Activity 165,000 square feet of lawn 28,000 square feet of low maintenance beds 22,000 square feet of high maintenance beds 19,000 miles 28 customers per square feet of lawn per square feet of low maintenance beds per square feet of high maintenance beds per mile per customer
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