300 points Problem 7-20 Evaluating the Profitability of Services [LO7-2, LO7-3, LO7-4. LO7-51 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 $22.40 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, a simple system consisting of four activity cost pools seemed to be adequate. The activity cost pools and their activity measures appear below: Activity Cost Pool Activity Measure Activity for the Yar Square feet cleaned(00s) 11,500 hundred square feet Travel to jobs 65.000 miles Number of jobs 1,800 jobs Other (costs of idle capacity and organization-sustaining costs) The total cost of operating the company for the year is $357,000, which includes the following costs: 147000 Cleaning equipment depreciation 9000 357.000 Resource consumption is distributed across the activities as follows: Distribution of Resource Consumption Across Activities Cleaning equipment depreciation