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 $23.25 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 (ees) Miles driven Number of jobs Activity for the Year 9,000 hundred square feet 409,500 miles 1.600 jobs Not applicable None The total cost of operating the company for the year is $345,000 which includes the following costs: Nages Cleaning supplies Cleaning equipment depreciation Vehicle expenses office expenses President's compensation Total cost $ 146.000 22.000 13,000 26, cea 57.000 31,00 $345.000 The total cost of operating the company for the year is $345,000 which includes the following costs: Nages Cleaning supplies Cleaning equipment depreciation Vehicle expenses Office expenses President's compensation Total cost $ 146,888 22,000 13,000 26,000 57,000 81,000 $ 345,000 im Resource consumption is distributed across the activities as follows: Distribution of Resource Consumption Across Activities Cleaning Travel Job Carpets to Jobs Wages Support 704 149 Cleaning supplies 2001 04 ON Cleaning equipment depreciation 04 Vehicle expenses ov 04 Office expenses 754 os 04 President's compensation 574 09 04 32 745 Other 164 09 265 254 434 68 Totat 2009 100 100 1001 100 1005 erences 04 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 Ronch-a 52-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 $46.50 (200 square feet a 523 25 per hundred square feet) Calculate the customer margineamed on this job Complete the
