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 $23.80 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 Cleaning carpets Travel to jobs Job support other (organization-sustaining costs and idle capacity costs) Activity Measure Square feet cleaned (905) Miles driven Number of Jobs Activity Yor the Year 8.500 hundred square feet 75,000 Iles 1.900 Jobs None Not applicable The total cost of operating the company for the year is $351.000 which includes the following costs Nages Cleaning supplies Cleaning equipment depreciation Vehicle expenses office expenses President's compensation Total cost $ 136,000 30,000 12,000 37,000 66,000 70,000 3 351,000 Resource consumption is distributed across the activities as follows: Distribution of nesource Consumption Across activities Cleaning Travel Carpets Wages to Jobs Job Support Other 74% Cleaning supplies 138 OR 100% ox Cleaning equipment depreciation ON 69% Vehicle expenses ex OK 323 office expenses OR 76% ON 24% OX President's compensation ox 58% 42% OX 0 28% 72 235 Total 100% 1001 100% 100% 100% 100% Job support consists of receiving calls from potential customers at the home office. scheduling jobs, biling, 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 400 square foot carpet-cleaning job at the Flying N Ranch - 54-mile round-trip Joumey 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 $95.20 (400 square feet o $23.80 per hundred square feet). Calculate the customer margin eared on this job, 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 400 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 $95.20 (400 square feet @ $23.80 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 Prepare the first-stage allocation costs to the activity cost pools. Cleaning Travel to Job Support Carpets Jobs Other Total 0 30,000 30,000 0 Wages Cleaning supplies Cleaning equipment depreciation Vehicle expenses Office expenses President's compensation Total cost 0 0 $ 30,000 $ 05 0 $ 0 $ 30,000 Activity Cost Pool Cleaning carpets Travel to jobs Job support Activity Rate per hundred square feet per mile per job The company recently completed a 400 square foot carpet-cleaning job at the Flying N Ranch-a 54-mile round-trip Journey Intermediate calculations and final answer to 2 decimal places.) from the company's offices in Bozeman Compute the cost of this job using the activity-based costing system. (Round your Cost of the job The revenue from the Flying N Ranch was 595.20 (4 hundred square feet $23.80 per hundred square feet). Calculate the customer margin earned on this job. (Negative customer margins should be indicated with a minus sign. Round your Intermediate calculations and final answers to 2 decimal places.) Customer margin
