Johnson Gardening Company provides lawn and garden services to its clients. The company uses an activity-based costing s

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Johnson Gardening Company Provides Lawn And Garden Services To Its Clients The Company Uses An Activity Based Costing S 1 (58.78 KiB) Viewed 9 times

Johnson Gardening Company provides lawn and garden services to its clients. The company uses an activity-based costing system for its overhead costs. The company has provided the following data. from its activity-based costing system. Activity Cost Pool Total Cost Mowing/trimming Job support Client support Other Total $150,750 25,725 7,250 25,000 $208,725 Total Activity. 12,250 hours 1,800 jobs 300 clients Not applicable The "Other" activity cost pool consists of the costs of idle capacity and organization-sustaining costs. One particular client, the Guzman family, requested 20 jobs during the year that required a total of 150 hours of gardening. For these services, the client was charged $7,000. Required: a. Compute the activity rates for the activity cost pools. Round off all calculations for the nearest whole cent. b. Using the activity-based costing system, compute the customer margin for the Guzman family. Round off all calculations to the nearest whole cent. c. Assume the company decides instead to use a traditional costing system in which ALL costs are allocated to customers on the basis of mowing/trimming hours. Compute the margin for the Guzman family. Round off all calculations to 2 decimal points (for example $11.29)