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 $22.80 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 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 (05) 13,5ee hundred square feet Travel to jobs Miles driven 314,500 miles Job support Number of jobs 1,7ee jobs other organization-sustaining costs and idle capacity costs) None Not applicable The total cost of operating the company for the year is $376,000 which includes the following costs Wages Cleaning supplies Cleaning equipment depreciation Vehicle expenses Office expenses President's compensation Total cost $ 147,00 34,000 7.000 37,000 67.000 84,000 $376,000 Resource consumption is distributed across the activities as follows: Resource consumption is distributed across the activities as follows: Distribution of Resource Consumption Across Activities Cleaning Carpets Wages 74% Cleaning supplies 100% Cleaning equipment depreciation 73% Vehicle expenses ex Office expenses ex President's compensation ex Travel to Jobs 10% B% ex Job Support es ex 0% ex 56% 315 Other 16% 0% 27% 16% 44% 69% Total 1eex 100% 100% 100% 188% 1ees 84% 0% ex cos 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 58-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 $136 80 (600 square feet @ $22 80 per hundred square feet). Calculate the customer margin earned on this job. Complete this question by entering your answers in the tabs below, Required 1 Required 2 Required 3 Required 4 Job Support Other Total Prepare the first-stage allocation of costs to the activity cost pools. Cleaning Carpets Travel to Jobs Wages Cleaning supplies Cleaning equipment depreciation Vehicle expenses Office expenses President's compensation Total cost Required Required 2 >
