Green Thumb Gardening is a small gardening service that uses activity-based cost

Question

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-1low 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 is first stage allocations of costs and has summarized its annual costs and activity as follows: Estimated verhead 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 Expected Activity Cost $ 83,400 185,000 square feet of lawn S 36,000 25,000 square feet of low maintenance beds $ 51,110 19,000 square feet of high maintenance beds $ 4,600 16,000 miles $ 9,500 40 customers Required Compute the activity rate for each of the activity cost pools. (Round your answers to 2 decimal places.) Activity Rate 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 per square ft of lawn per square ft of low maintenance beds per square ft of high maintenance beds per mile per customer

Explanation / Answer

Caring my lawn 0.45 =83400/185000 Caring for garden beds-low maintenance 1.44 =36000/25000 Caring for garden beds-high maintenance 2.69 =51100/19000 Travel to jobs 0.29 =4600/16000 Customer billing and service 237.50 =9500/40

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