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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 $23.25 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, hes 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. Cleaning carpets 11,500 undrar sare feet Travel to joke Job support Other (organization-sustaining costs and idle The total cost of operating the company for the year is $355,000 which includes the folowing costs Cleaning supplies Cleaning in depreciation - Besource consumption is distributed across the activities as fotos Jab Support the fatal 4 72% 425 Job support consists of recening calls from potential customers at the home once scheming jons, ingresaving sues, and so Required: 1. Prepare the at-stage allocation of costs to the activity cost pos 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 50-mile round-trip journey bram the company's offices in Bozeman Compute the cost of this job using the activity-based costing system 4. The venue to the Pying to Ranch was $129.50 1600 square feet $23.25 per hunded squee feet Calculate the customer margin wameds 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 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 $139.50 (600 square feet $23.25 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 Prepare the first-stage allocation of costs to the activity cost pools Wages Cleaning supplies Clearing equipment depreciation Vehicle expenses Cleaning Carpets Travel to Jobs Job Support Other Total S 0 9 0 D President's compensation D Toll $ 01 0% D. Required 2 >
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