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Lawn care: key activities, cost drivers

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Choose a company in any of the following categories: airline, florist, bookstore, bank, grocery store, restaurant, college, retail clothing shop, movie theater, or lawn service. In this activity, you will be making reasonable estimates of the types of costs and activities associated with this company; companies do not typically publish internal cost or process information. Be reasonable in your cost estimates and include your assumptions used in selecting costs.

1. Describe the company selected, including its products or services.
2. List eight key activities performed at this company. Choose at least one activity in the areas of production, sales, human resources, and accounting.
3. For each of the key activities, list a potential cost driver for that activity and describe why this cost driver would be appropriate for the associated activity.

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Lawn Care

This firm maintains lawns, garden areas and live plants for residential and commercial properties. It has a truck with a drive-up ramp for the large lawn tractor, a hand mower, leaf blowers and power edgers for the team. Customers schedule weekly, semi-weekly, monthly or project (usually seasonal plantings for commercial properties).

What is a cost driver? A cost driver is an activity that results in costs. For instance, when you drive your car, that "causes" gas expense. So, miles driven is a "cost driver" of gasoline expense. The number of people living at your house is a cost driver of groceries expense. That is, the more people you have living ...

Solution Summary

Nice activities are given with associated cost drivers. A paragraph describes the business.