Check my work Thumb Gardening is a small gardening service that uses activity-ba

ID: 2542451 • Letter: C

Question

Check my work Thumb Gardening is a small gardening service that uses activity-based costing to estimate costs for pricing and other purposes of customers. In addition, the costs of maintaining garden beds depends on The proprietor of the company believest beds, the distance to travel to customers, and the number ietor of the company believes that costs are driven primarily by the size of customer lawns, the size of cust plants). Accordingly, the company uses the five activity cost pools isted below points activity Measure Activity Cost Caring for lawn Caring for garden beds-low maintenance Caring for garden beds-high maintenance Travel to jobs Custoner billing and service Square feet of la Square feet of low naintenance beds Square feet of high maintenance beds Nurber of customers References The company already has complete d its first stage allocations of costs and has summarized its annual costs and activity as follows Estinated Overhead Expected Activity Cost s 77,80 165,a80 square feet of lawn activity Cost Pool Caring for lawn Caring for garden beds-low naintenanco Caring for garden beds-high naintenance Travel to jobs Custoner billing and service 3e,48 27,08 square feet of 1ow naintenance beds $ 59,430 21,800 square foot of high maintenance beds s 4,800 18,808 niles 5 9,908 38 custoners Required: Compute the activity rate for each of the activity cost pools. (Round your answers to 2 decimal places) Cost Activity Rate Caring for laan per square ft of lawn Caring for garden beds low maintenande per square ft of low maintenance beds Prev 1 of 3 Next >

Explanation / Answer

Answer:-

Computation of activity rate for each of the activity cost pools

Activity Cost Pool

Estimated overhead cost $

Expected Activity

Calculation

Activity Rate

Caring for lawn

77800

square feet of lawn

$77800/165000

$.47 per square foot of lawn

Caring for garden beds-low maintenance

30400

square feet of low maintenance beds

$30400/27000

$1.13 per square foot of low maintenance beds

Caring for garden beds-

high maintenance

59430

square feet of high maintenance beds

$59430/21000

$2.83 per square foot of high maintenance beds

Travel to jobs

4800

miles

$4800/18000

$.27 per mile

Customer billing

and service 9900 customers $9900/38 $260.53per customer

Where

Activity Rate = Estimated Overhead Cost $ / Expected Activity