always charged a flat fee per hundred square feet of carpet cleaned. The current fee is $23.95 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 Activity Measure Activity for the Year Cleaning carpets Square feet cleaned (ees) 6,5ee hundred square feet Travel to Jobs Miles driven 168,000 miles Job support Number of jobs 1,700 jobs Other (organization-sustaining costs and idle capacity costs) Not applicable None The total cost of operating the company for the year is $351.000 which includes the following costs: Wages Cleaning supplies Cleaning equipment depreciation Vehicle expenses Office expenses President's compensation Total cost $ 141,000 28,888 13,000 29, eee 57,000 83,eee $ 351, eee Resource consumption is distributed across the activities as follows: Job Support Other 18% Distribution of Resource Consumption Across Activities Cleaning Travel Carpets to Jobs Wages 77% Cleaning Supplies 100% 86 Cleaning equipment depreciation 605 Vehicle expenses 76% Office expenses 86 85 President's compensation 86 33% Total 1885 100% 1885 100% 100% 1886 63% 386 37% 786 Job support consists of recelving calls from potential customers at the home office, scheduling Jobs, billing, resolving issues, and so on. Job Support B other 185 Distribution of Resource Consumption Across Activities Cleaning Travel Carpets to Jobs Wages Cleaning supplies 100 Cleaning equipment depreciation 67% Vehicle expenses Office expenses President's compensation 33% Total lees 100% 10e 100 100 100 37% 38 78% 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 800 square foot carpet-cleaning Job at the Flying N Rancha 53-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 $191.60 (800 square feet @ $23.95 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 Other Total $ 0 Prepare the first-stage allocation of costs to the activity cost pools. Cleaning Travel to Carpets Jobs Job Support Wages Cleaning supplies Cleaning equipment depreciation Vehicle expenses Office expenses President's compensation 0 0 0 0 0
