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Gallatin Carpet Cleaning has always charged a flat fee per hundred square feet of carpet cleaned. The current fee is $ 1 3 . 9
Gallatin Carpet Cleaning 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 making a profit on jobs requiring considerable
travel time. The owner's daughter suggested answering this question by designing an activitybased costing system using the
information shown below:
The total cost of operating the company for the year is $ which includes the following costs:
She distributed these operating costs across her four activities as follows:
Job support consists of receiving calls from potential customers at the home office, scheduling jobs, billing, resolving issues, and so
on
Required:
Prepare the firststage allocation of costs to the activity cost pools.
Compute the activity rates for the activity cost pools.
The company recently completed a squarefoot carpetcleaning job at the Flying N Rancha mile roundtrip from the
company's home office. Compute the cost of this job using the activitybased costing system.
The revenue from the Flying Ranch was $ square feet @$ per hundred square feet Calculate the customer
margin earned on this job.
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