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 maintenanc 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 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 its first stage allocations of costs and has summarized its annual costs and activity as follows:

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
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Chapter9: Responsibility Accounting And Decentralization
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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 maintenanc
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
$ 76,200
$ 28,800
$ 56,800
$ 4,600
$ 9,500
Expected Activity
180,000 square feet of lawn
26,000 square feet of low maintenance beds
20,000 square feet of high maintenance beds
17,000 miles
22 customers
Required:
Compute the activity rate for each of the activity cost pools. (Round your answers to 2 decimal places.)
Activity Rate
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 maintenanc 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 $ 76,200 $ 28,800 $ 56,800 $ 4,600 $ 9,500 Expected Activity 180,000 square feet of lawn 26,000 square feet of low maintenance beds 20,000 square feet of high maintenance beds 17,000 miles 22 customers Required: Compute the activity rate for each of the activity cost pools. (Round your answers to 2 decimal places.) Activity Rate 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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