10 Check my work 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 $23.10 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: 6.5 points Activity Measure Square feet cleaned 00s) Activity for the Year 7,500 hundred square feet eBook Activity Cost Pool Cleaning carpets Travel to jobs 245,000 Miles jobs 1,700 Miles driven Number of jobs Print References Other organization-sustaining costs and idle capacity costs) Not applicable None The total cost of operating the company for the year is $355,000 which includes the following costs: 140,000 Wages cleaning supplies 34,000 nt depreciation Vehicle 28,000 office expenses President 's compensation 63,000 73,000 Total cost $355,000 Resource consumption is distributed across the activities as follows: 10 Check my work 1 Resource consumption is distributed across the activities as follows: 6.5 Distribution of Resource Consumption Across Activities Cleaning Carpets 778 Job Travel points to Jobs Support 0% Other Total 138 103 100% Wages ciean supp depreciation eBook 698 0% 0s 318 100% Vehicle expenses office expenses President's compensation 09 218 03 79% 100 Print 0% 0% 63% 378 100% 08 08 338 67% 100 References 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 58-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 $92.40 (400 square feet@ $23.10 per hundred square feet). Calculate the customer margin earned on this job