Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Gallatin Corpet Cleaning is a small, family owned business operating out of Bozeman, Montana. For its services, the company has always charged a fat fee

image text in transcribed
Gallatin Corpet Cleaning is a small, family owned business operating out of Bozeman, Montana. For its services, the company has always charged a fat fee per hundred square feet of carpet clenned. The current fee is 523.75 per hundred square feet. However. there is some question about whether the company is actually moking ary money on jobs for some customers-perticularly 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 octivity cost pools. The activity cost pools and their activity measures appear below: The total cost of operating the company for the yeor is $361,000 which includes the following costs: Resource consumption is distributed across the activites as follows: 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 ot the Flying N Ranch-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 $95.00 (400 square feet 9$23.75 per hundred square feet) Calculate the customer margin eamed on this job. Cemplete this question by entering your answers in the tabs below. Prepare the first-stage allocation of costs to the activity cost pools

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

EBay Sales Tracker Quick And Easy Bookkeeping System

Authors: Queen Thrift

1st Edition

B08KJ5FJND, 979-8692592774

More Books

Students also viewed these Accounting questions

Question

Design a training session to maximize learning. page 309

Answered: 1 week ago