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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 $23.05 per hundred square feet. However, there is some question about whether the company is actually making any money on jobs for some customersparticularly those located on remote ranches that require considerable travel time. The owners 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 (00s) 7,000 hundred square feet
Travel to jobs Miles driven 143,500 miles
Job support Number of jobs 1,700 jobs
Other (organization-sustaining costs and idle capacity costs) None Not applicable

The total cost of operating the company for the year is $352,000 which includes the following costs:

Wages $ 136,000
Cleaning supplies 21,000
Cleaning equipment depreciation 11,000
Vehicle expenses 37,000
Office expenses 69,000
Presidents compensation 78,000
Total cost $ 352,000

Resource consumption is distributed across the activities as follows:

Distribution of Resource Consumption Across Activities
Cleaning Carpets Travel to Jobs Job Support Other Total
Wages 79 % 12 % 0 % 9 % 100 %
Cleaning supplies 100 % 0 % 0 % 0 % 100 %
Cleaning equipment depreciation 69 % 0 % 0 % 31 % 100 %
Vehicle expenses 0 % 84 % 0 % 16 % 100 %
Office expenses 0 % 0 % 57 % 43 % 100 %
Presidents compensation 0 % 0 % 27 % 73 % 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 200 square foot carpet-cleaning job at the Flying N rancha 56-mile round-trip journey from the companys offices in Bozeman. Compute the cost of this job using the activity-based costing system.

4. The revenue from the Flying N ranch was $46.10 (200 square feet @ $23.05 per hundred square feet). Calculate the customer margin earned on this job.

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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. Job Cleaning Carpets Travel to Jobs Support Other Total $ Wages Cleaning supplies Cleaning equipment depreciation Vehicle expenses Office expenses President's compensation Total cost $ 0 $ 0 $ 0 $ 0 $ Required 1 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 Rate Activity Cost Pool Cleaning carpets Travel to jobs Job support per hundred square feet per mile per job Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 The company recently completed a 200 square foot carpet-cleaning job at the Flying N ranch-a 56-mile round-tr from the company's offices in Bozeman. Compute the cost of this job using the activity-based costing system. (R intermediate calculations and final answer to 2 decimal places.) Cost of the job Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 The revenue from the Flying N ranch was $46.10 (2 hundred square feet @ $23.05 per hundred square feet). Cal customer margin earned on this job. (Round your intermediate calculations and final answers to 2 decimal places Customer margin

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