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 $24.05 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 Activity Measure Activity for the Year Cleaning carpets Square feet cleaned (80) 13,500 hundred square feet Travel to jobs Miles driven 267,000 miles Job support Number of jobs 1,700 jobs Other (organization-sustaining costs and idle capacity costs) None Not applicable The total cost of operating the company for the year is $355,000 which includes the following costs: Wages $ 141,000 Cleaning supplies 30,000 Cleaning equipment depreciation 6,000 Vehicle expenses 33,000 Office expenses 64,000 President's compensation 81,000 Total cost 355,000 Resource consumption is distributed across the activities as follows: Distribution of Resource Consumption Across Activities Cleaning Travel to Job Carpets Jobs Support Other Total Wages 73 134 1004 Cleaning supplies 1805 09 1004 Cleaning equipment depreciation 694 314 1004 Vehicle expenses 794 215 1004 Office expenses 04 04 624 384 1004 President's compensation 0 ex 724 1004 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 600 square foot carpet-cleaning job at the Flying N Ranch-a 54-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 $144.30 (600 square feet @ $24.05 per hundred square feet). Calculate the customer margin earned on this job. 09 145 04 09 04 284