Gallatin arpet 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 $23.00 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 Cleaning carpets Travel to jobs Wages Cleaning supplies Cleaning equipment depreciation Vehicle expenses Office expenses President's compensation Total cost Activity Measure Square feet cleaned (00s) Miles driven Number of jobs Job support Other (organization-sustaining costs and idle capacity costs) The total cost of operating the company for the year is $333,000 which includes the following costs: $ 139,000 24,000 6,000 32,000 Wages Cleaning supplies Cleaning equipment depreciation Vehicle expenses Office expenses President's compensation None 56,000 76,000 $ 333,000 Resource consumption is distributed across the activities as follows: Distribution of Resource Consumption Across Activities Cleaning Travel to Carpets 79% 100% 74% 0% 0% 0% Jobs Job Support 12% 0% 0% 76% 0% 0% 0% 0% 0% 0% 56% 27% Activity for the Year 11,000 hundred square feet 283,500 miles 1,800 jobs Other 9% 0% 26% 24% 44% 73% Not applicable Total 100% 100% 100% 100% 100% 100% 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 200 square foot carpet-cleaning Job at the Flying N Ranch-a 59-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 $46.00 (200 square fee @ $23.00 per hundred square feet). Calculate the customer margin earned on this job.

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 $23.00 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 conslderable travel tume. 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. The total cost of operating the company for the year is $333,000 which indudes the following costs Resource consumption is distributed across the activites as follows. Job support consists of receiving calls from potential customers at the home office, scheduling jobs, biling, resolving issues, and so on. Required: 1. Prepare the first-stage allocation of costs to the activity cost poois. 2 Compute the activity rates for the activity cost pools. 3. The company recently completed a 200 square foot carpet-cleaning job at the Flying N Ranch-a 59 -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 $46.00 (2.00 square feet $23.00 per hundred square feet) Calculate the customer margin earned on this job. Complete this question by entering your answers in the tabs below