Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

image text in transcribed
image text in transcribed
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 $23.00 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. 050:49 Activity Cost Pool Cleaning Carpets Travel to jobs Job Support Other (organization-sustaining costs and Idle capacity costs) Activity Measure Square feet cleaned (0) Miles driven Number of jobs Activity for the Year 7.50 hundred square feet 100.000 miles 1.709 jobs eBook Not applicable references The total cost of operating the company for the year is $374,000 which includes the following costs: wares Cleaning supplies Cleaning equipment depreciation Vehicle expenses Office expenses President's compensation Total cost 145.000 35.000 15, 35.000 66.000 78,000 34,000 $ 12 resource consumption is distributed across the activities as Tonos Job Support Other Distribution of Resource Consumption Across Activities Cleaning Travel Carpets to Jobs Wages Cleaning Supplies cleaning equipment depreciation Vehicle expenses office expenses President's compensation ins 8015033 eBook Job support consists of receiving calls from potential customers at the home office, scheduling jobs, billing, resolving issues, and so Print References 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 59-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 $138.00 (600 square feet $23.00 per hundred square feet) Calculate the customer margin eamed on this job. Complete this question by entering your answers in the tabs below

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Concept Audits A Philosophical Method

Authors: Nicholas Rescher

1st Edition

1498540392, 978-1498540391

More Books

Students also viewed these Accounting questions

Question

2. Anticipate reader objections

Answered: 1 week ago

Question

how does a host receive the ipv 4 address of the default gateway

Answered: 1 week ago