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Gallatin Carpet CleanIng has always charged a flat fee per hundred square feet of carpet cleaned. The current fee is $12.25 per hundred square feet.
Gallatin Carpet CleanIng has always charged a flat fee per hundred square feet of carpet cleaned. The current fee is $12.25 per hundred square feet. However, there is some question about whether the company is making a profit on jobs requiring considerable travel time. The owner's daughter suggested answering this question by designing an activity-based costing system using the Information shown below: The total cost of operating the company for the year is $344,000 which includes the following costs: She distributed these operating costs across her four actlvitles as follows: Job support consists of recelving calls from potentlal 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 actlvity rates for the actlvity cost pools. 3. The company recently completed a 400 -square-foot carpet-cleaning job at the Flying N Ranch-a 58 -mile round-trip from the company's home office. Compute the cost of this job using the activity-based costing system. 4. The revenue from the Flying N Ranch was $49.00 (400 square feet @$12.25 per hundred square feet). Calculate the customer margin earned on this job
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