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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

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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 hundred square feet of carpet cleaned. The current fee is $24.00 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: Activity Cost Tool Activity Measure Activity for the Year Cleaning carpets Square feet cleaned (008) 8,000 hundred square feet Travel to jobs Miles driven 243,000 miles Job support Number of jobs 1,900 jobs Other (organization-sustaining costs and idle capacity costs) Not applicable None The total cost of operating the company for the year is $369,000 which includes the following costs: Wages Cleaning supplies Cleaning equipment depreciation Vehicle expenses ottice expenses President's compensation Total cout $ 144,000 24,000 15,000 39.000 68,000 79.000 $369,000 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 Travel Carpets to Jobs Wages 726151 cleaning supplies 1000 Os Cleaning equipment depreciation 684 00 Vehicle expenses 00 858 office expenses 08 09 President's compensation Os 00 Job Support 09 08 08 08 608 350 Total 1000 1008 Other 131 09 320 150 400 658 1008 1008 1000 1000 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 - 57-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 $144.00 (600 square feet o $24.00 per hundred square feet). Calculate the customer margin earned on this job

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