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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 2 . 4

Gallatin Carpet Cleaning has always charged a flat fee per hundred square feet of carpet cleaned. The current fee is $12.40 per hundred square feet. However, there is some question about whether the company is making a profit on jobs requiring considerable travel time. The owners daughter suggested answering this question by designing an activity-based costing system using the information shown below:Activity Cost PoolActivity MeasureActivity for the YearCleaning carpetsSquare feet cleaned (00s)13,000hundred square feetTravel to jobsMiles driven382,000milesJob supportNumber of jobs2,300jobsOther (organization-sustaining costs and idle capacity costs)NoneNot applicableThe total cost of operating the company for the year is $378,000 which includes the following costs:Wages$ 149,000Cleaning supplies24,000Cleaning equipment depreciation19,000Vehicle expenses33,000Office expenses70,000Presidents compensation83,000Total cost$ 378,000She distributed these operating costs across her four activities as follows:Distribution of Resource Consumption Across Activities Cleaning CarpetsTravel to JobsJob SupportOtherTotalWages72%10%0%18%100%Cleaning supplies100%0%0%0%100%Cleaning equipment depreciation64%0%0%36%100%Vehicle expenses0%81%0%19%100%Office expenses0%0%59%41%100%Presidents compensation0%0%28%72%100%Job support consists of receiving calls from potential customers at the home office, scheduling jobs, billing, resolving issues, and so on.Required:Prepare the first-stage allocation of costs to the activity cost pools.Compute the activity rates for the activity cost pools.The company recently completed a 400-square-foot carpet-cleaning job at the Flying N Rancha 54-mile round-trip from the companys home office. Compute the cost of this job using the activity-based costing system.The revenue from the Flying N Ranch was $49.60(400 square feet @ $12.40 per hundred square feet). Calculate the customer margin earned on this job.

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