Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Gallatin Carpet Cleaning is a small, formily owned business operating out of Bozeman, Montana. For its services, the company has always charged a flat fee

image text in transcribed
Gallatin Carpet Cleaning is a small, formily 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 $22.75 per hundred sqoare feet. However, there is some question about whether the company is actually making any mopey 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 bosed costing. After some discussion, she designed a simple system consisting of four octivity cost pools. The activity cost pools and their activity measures oppeor below. The total cost of operating the company for the yeor is $357,000 which includes the following costs: Resource consumption is distributed across the activities as follows: Job support consists of teceiving calls from potentiol customers ot 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 ot the Flying N Ranch-a 55 -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 Fying N Ranch wos $45,50 (200 square feet 0$22.75 per hundred square feet. Calculate the customer margin earned on this job. Complete this question by enterine vour answres in the tabs below

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing And Assurance Services A Systematic Approach

Authors: William Messier, Steven Glover, Douglas Prawitt

12th Edition

1264100671, 978-1264100675

More Books

Students also viewed these Accounting questions

Question

=+a) What proportion of the sample reported being certified?

Answered: 1 week ago

Question

What is meant by organisational theory ?

Answered: 1 week ago

Question

What is meant by decentralisation of authority ?

Answered: 1 week ago

Question

Briefly explain the qualities of an able supervisor

Answered: 1 week ago

Question

Define policy making?

Answered: 1 week ago

Question

Define co-ordination?

Answered: 1 week ago