5. 3.57 points value 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 $22.25 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 loc ated 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 Measure Square feet cleaned (00s) 12,500 hundred square feet Square fee cleaned (os) 2 Activity Cost Pool Activity for the Year Cleaning carpets Travel to jobs Job support Other (costs of idle capacity and Miles driven Number of jobs 264,000 miles 1,800 jobs and None organization-sustaining costs) None Not applicable The total cost of operating the company for the year is $354.000, which includes the following costs Wages Cleaning supplies Cleaning equipment depreciation 20,000 s 136,000 25,000 Vehicle expenses Office expenses President's compensation 26,000 69,000 78,000 Total cost 354,000 Resource consumption is distributed across the activities as follows Distribution of Resource Consumption Across Activities CleaningJobs Cleaning Travel to Job CarpetsJobs Support Other Total .. support 0% 12% 056 79 77% Wages Cleaning supplies 100% 100% 11% 100% .nr. Compaq LA2205wg