Green Thumb Gardening is a small gardening service that uses activity-based costing to estimate costs...

80.2K

Verified Solution

Question

Accounting

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 $ 80,200 165,000 square feet of lawn
Caring for garden bedslow maintenance $ 32,800 25,000 square feet of low maintenance beds
Caring for garden bedshigh maintenance $ 51,870 19,000 square feet of high maintenance beds
Travel to jobs $ 3,600 16,000 miles
Customer billing and service $ 7,500 28 customers

Required:

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

Prev

Question 2 of 4 Total2 of 4

Visit question mapNext

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!
Become a Member

Other questions asked by students