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\mathrm{.}80$ 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

lacated on remote ranches that require considerable travel time. The owner's daughter, home for the summer from college, has

suggested linvestigating 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 Fool

Cleaning carpets

Travel to jobs

Activity Meosure

square feet cleaned $(03$s$)$

Miles driven

Activity for the Year

Travel to support

Miles driver of fobs

other $($organization$-$sustaining costs and idle

capocity costs$)$

Wrone

$5,590$ hundred square feet

$66,500$ illes

$2,000$ jobs

Not applicable

The total cost of operating the company for the year is $$351,000$ which includes the following costs.

Resource consumption is distributed across the activities as follows:

Job support consists of recelving calls from potentlal 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 $N$ Ranch$-$a $56-$mile round$-$trip journey from

the company's offices in Bozeman. Compute the cost of this job using the activity$-$based costing system.

The revenue from the Flying $N$ Ranch was $$95\mathrm{.}20(400$ square feet @$$23\mathrm{.}80$ per hundred square feet$).$ Calculate the customer

margin earned on this job

Complete this question by entering your answers in the tabs below.

Prepare the first$-$stage allocation of costs to the activity cost pools.