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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 $22.95 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) 12,000 hundred square feet Travel to jobs Miles driven 120,000 miles Job Support Number of jobs 1,900 jobs Other (organization-sustaining costs and idle capacity costs) None Not applicable The total cost of operating the company for the year is $367,000 which includes the following costs: Wages $ 136,000 Cleaning supplies 31,000 Cleaning equipment depreciation Vehicle expenses 35,000 Office expenses 65.000 President's compensation 82,800 14,000 Total cost $ 367,000 Resource consumption is distributed across the activities as follows: Distribution of Resource Consumption Across Activities Cleaning Travel to Job Carpets Jobs Support Other Total Wages 745 115 09 154 100% Cleaning supplies 1005 09 09 09 1089 Cleaning equipment depreciation 714 es 09 299 Vehicle expenses 1089 ON 795 04 214 100% Office expenses es 04 574 434 100% President's compensation os ON 354 654 100 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 400 square foot carpet-cleaning job at the Flying N Ranch-a 60-mile round-trip Journey from the company's offices in Bozeman, Compute the cost of tuis job using the activity-based costing system, 4. The revenue from the Flying N Ranch was $91.80 (400 square feet @ $22.95 per hundred square feet). Calculate the customer margineamed on this job

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