First-stage allocation, activity-based costing, service sector. LawnCare USA provide...

First-stage allocation, activity-based costing, service sector. LawnCare USA provides lawn care and landscaping services to commercial clients. LawnCare USA uses activity-based costing to bid on jobs and to evaluate their profitability. LawnCare USA reports the following annual costs:

Sunset Office Park, a new development in a nearby community, has contacted LawnCare USA to provide an estimate on landscape design and annual lawn maintenance. The job is estimated to require a single landscape design requiring 40 design hours in total and 250 direct labor-hours annually. LawnCare USA has a policy of pricing estimates at 150% of cost. 1. Allocate LawnCare USA’s costs to the activity-cost pools and determine the activity rate for each pool. 2. Estimate total cost for the Sunset Office Park job. 3. How much should LawnCare USA bid to perform the job? 4. Sunset Office Park asks LawnCare USA to give an estimate for providing its services for a 2-year period. What are the advantages and disadvantages for LawnCare USA to provide a 2-year estimate?