1 Gallatin Carpet Cleaning is a small, family-owned business operating out of Bozeman, Montana. For its services, the company has always charged a flat fee per hundred square feet of carpet cleaned. The current fee is $23.35 per hundred square feet. However, there is some question about whether the company is actually making any money on jobs for some customers-particularly those located on remote ranches that require considerable travel time. The owner's daughter, home for the summer from college, has suggested investigating this question using activity-based costing. After some discussion, she designed a simple system consisting of four activity cost pools. The activity cost pools and their activity measures appear below. Activity Cost Pool Cleaning carpets Travel to jobs Job support Other (organization-sustaining costs and idle capacity costs) Activity Measure Square feet cleaned (05) Miles driven Number of jobs Activity for the Year 6,000 hundred square feet 144,500 miles 1,800 jobs None Not applicable The total cost of operating the company for the year is $336,000 which includes the following costs: Wages cleaning supplies Cleaning equipment depreciation Vehicle expenses office expenses President's compensation Total cost $ 136,000 27,000 14,000 27,000 56,000 76.000 $ 336,000 Resource consumption is distributed across the activities as follows: Distribution of Resource Consumption Across Activities Cleaning Travel Job Carpets to Jobs Support Wages 710 140 08 cleaning supplies 1000 05 ON Cleaning equipment depreciation 738 08 08 Vehicle expenses 0$ 825 0$ office expenses OB 08 576 Other 156 01 276 Total 1001 1001 1001 1000 1000 188 430 Prey 1 of 5 !!! Next > Resource consumption is distributed across the activities as follows: Distribution of Resource Consumption Across Activities Cleaning Travel Carpets to Jobs Wages 718 140 cleaning supplies 1000 08 Cleaning equipment depreciation 730 08 Vehicle expenses 08 828 office expenses 06 00 President's compensation 08 00 Other 150 08 Job Support 09 00 0 08 576 284 278 Total 1000 1000 1001 1001 1001 1000 185 438 721 Job support consists of receiving calls from potential customers at the home office, scheduling jobs, billing, resolving issues, and so on. Required: 1. Prepare the first stage allocation of costs to the activity cost pools. 2. Compute the activity rates for the activity cost pools. 3. The company recently completed a 400 square foot carpet-cleaning job at the Flying N Ranch-a 57-mile round-trip journey from the company's offices in Bozeman Compute the cost of this job using the activity-based costing system. 4. The revenue from the Flying N Ranch was $93.40 (400 square feet @ $23.35 per hundred square feet). Calculate the customer margin earned on this job. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Prepare the first stage allocation of costs to the activity cost pools. Cleaning Carpets Travel to Jobs Job Support Other Total wan Prey 1 of 5 !!! Next >