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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
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 $23.75 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 questlon using actlvity-based costing. After some discussion, she designed a simple system consisting of four actlivity cost pools. The actlvity cost pools and thelr actlivity measures appear below: The total cost of operating the company for the year is $341,000 which Includes the following costs: Resource consumption is distributed across the actlvitles as follows: Job support consists of recelving calls from potentlal customers at the home office, scheduling jobs, billing, resolving Issues, and so on. Requlred: 1. Prepare the first-stage allocation of costs to the actlvity cost pools. 2. Compute the actlvity rates for the activity cost pools. 3. The company recently completed a 200 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 actlilty-based costing system. 4. The revenue from the Flylng N Ranch was $47.50 (200 square feet @$23.75 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. the company's offices in Bozeman. Compute the cost of this job using the actlilty-based costing system. 4. The revenue from the FlyIng N Ranch was $47.50 (200 square feet @$23.75 per hundred square feet). Calculate the customer margin earned on this job. Complete this question by entering your answers in the tabs below. The company recently completed a 200 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. Note: Round your intermediate calculations and final answer to 2 decimal places. The revenue from the Flying N Ranch was $47.50 (200 square feet @$23.75 per hundred square feet). Calculate the customer margin earned on this job. Note: Negative customer margins should be indicated with a minus sign. Round your intermediate calculations and final answers to 2 decimal places. Complete this question by entering your answers in the tabs below. Compute the activity rates for the activity cost pools. Note: Round your answers to 2 decimal places
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