Gallatin Carpet Cleaning is a small family-owned business operating out of Bozeman, Montana. For its services, the company hos always charged a flot fee per hundred square feet of corpet cleaned. The current fee is $23.90 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 (008) 14,500 hundred square feet Travel to jobs Miles driven 176,500 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 $362,000 which includes the following costs: Hages Cleaning supplies Cleaning equipment depreciation Vehicle expenses office expenses President's compensation Total cost $ 150,000 23,000 15,000 28,000 64,000 82,000 $362,000 Resource consumption is distributed across the activities as follows: Distribution of Resource Consumption Across Activities Cleaning Travel Carpeta to Jobs Wagen 768 111 Cleaning supplies 1000 00 Cleaning equipment depreciation 698 OU Vehicle expenses 05 840 office expenses 0 08 President's compensation 08 ON Job Support 08 09 ON 09 568 350 Other 135 08 310 160 448 650 Total 1004 1008 1008 1005 1005 1001 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 51-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 $143.40 (600 square feet o $23.90 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 Other Total Prepare the first-stage allocation of costs to the activity cost pools. Cleaning Travel to Carpets Job Support Jobs Wages Cleaning supplies Cleaning equipment depreciation Vehicle expenses Office expenses President's compensation Total cost Required Required 2 > Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Compute the activity rates for the activity cost pools. (Round your answers to 2 decimal places.) Activity Cost Pool Activity Rate Cleaning carpets per hundred square feet Travel to jobs Job support per job per mile Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 The company recently completed a 600 square foot carpet-cleaning job at the Flying N Ranch-a 51-mile round-trip journey from the company's offices in Bozeman. Compute the cost of this job using the activity-based costing system. (Round your intermediate calculations and final answer to 2 decimal places.) Cost of the job Required 1 Required 2 Required 3 Required 4 The revenue from the Flying N Ranch was $143.40 (6 hundred square feet @ $23.90 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 (Required 3 Required
