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5 . Gallatin carpet cleaning is a small, family - owned business operating out of Bozeman, Botana. For its services, the company has always charged
Gallatin carpet cleaning is a small, familyowned business operating out of Bozeman, Botana. For its services, the company has always charged a flat fee per hundred square feet of carpet cleaned. The current fee is $ per hundred square feet. However, there is some question about whether the company is actually making any money on job for some customersParticularly 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 measure appear below:
tableActivity cost pool,Activity measure,tableActivity forthe yearCleaning carpet..,Square feet cleaned HundredTravel to job....,Miles driven, MilesJob support..,Number of job, JobsOthesNone,Not applicable
The total cost of operating the company for the year is $ which include the following costs:
tableWage$
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