Can you help me with parts 3 and 4. Im not sure if the work I did for 3 is even correct.
Mead Cleaning Company is a family-owned business operating out of Bozeman, Montana. For its home carpet cleaning services, the company has always charged a flat fee based on one hundred square feet of carpet cleaned. The current fee is $30 per hundred square feet. The Mead Company home carpet-cleaning fee is a step cost to the customers. For example, the minimum charge for a Mead carpet-cleaning technician to come to a customer's location is $30. If a customer has 101 to 199 square feet of carpet to clean, the fee is $60 (S30 x 2). The Mead family believes this feestructure provides enough revenue to cover its travel costs and provide a profit. The company's accountant is concerned that the company might not be covering all costs on jobs for some customers. Of particular concern are the jobs done for ranchers that require considerable travel time. Recently the accountant talked with Mead's CEO and Mead's home carpet-cleaning service manager about these concerns and suggested that a simple activity-based costing system be implemented. After some discussion, it was decided that three activity cost pools and activity measures should be implemented. This information is presented in Table 1. The job support" activity pool consists of costs related to receiving calls from potential customers, scheduling jobs, billing, resolving issues, etc. Table 1 Overhead Activity Cost Pools & Activity Measures Activity for the Year Activity Cost Pool Cleaning carpets Travel to/from jobs Job support Other Activity Measure 100 square feet 20,000 blocks of 100 square feet Miles driven 60,000 miles Number of jobs2.000 None jobs Not applicable * Organization-sustaining costs and idle capacity costs The total cost of operating the home carpet cleaning services for the year is $430,000 as shown in Table 2. Table 2 Total Home Carpet Cleaning Service Costs Wages Cleaning supplies Cleaning equipment depreciation Vehicle expenses Office expenses Service Manager's salary $150,000 $40,000 20,000 80,000 60,000 Total Costs It was decided to include wages in the overhead activity pools because the technicians also talk with customers who have problems or complaints and also work on the company vehicles when needed. Additionally, both of the support staff employees are trained to go out on jobs and do so if needed. Having the technicians and support staff to log how they spent their time would not be helpful and probably would not be received well by the employees. Consequently, it was decided that the cost of wages be allocated to the four cost pools based on the CEO's and service manager's experience with the company. All other distributions of resource consumption across the activities (cost pools) were based on an analysis of company records Page 2 of 5 TI-84 PluS CE
