Gallotin 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 $23.55 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 Control Activity Measure Activity for the Year Cleaning carpets Square rest cle 100 19.000 square feet Travel to Jobs Miles driven 314,000 miles Job Support ber of jobs 1.500 5 Other (organizatorstaining costs and idle capacity cost one Not rolle The total cost of operating the company for the year is $360.000 which includes the following costs. 5.145,000 Cle suplier 25,000 Cleaning pot depreciation 14,000 vehtelee 36,000 offices 69,000 President Cation 23.000 Totalt $300.000 Resource consumption is distributed across the activities as follows: Distribution of resource Consumption Across Activities Cleaning Carpets 700 Cleaning supplies 100% Cleaning equipment depreciation 739 Vehicles Os office expenses Presidente comentation 0 Travel to Jobs 109 Job Suport S85553 1666555 Other 301 os 27 215 364 Total 100 100% 100% 100% 100% 1001 ON 100 294 Job support consists of receiving calls from potential customers at the home office, scheduling Jobs, biling, resolving issues, and 50 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. 600 square foot carpet-cleaning job at the Flying N Ronch- 59 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 $141.30 (600 square feet a $23,55 per hundred square feet) Calculate the customer margin earned on this job stage allocation of costs to the activity cost pools. Cleaning Carpets Travel to Jobs Job Support Other Total Oo 0 Wages Cleaning supplies Cleaning equipment depreciation Vehicle expenses Office expenses President's compensation Total cost 0 0 0 $ 0 $ 0 0 $ 0 $ 0 Requlred Required 2 > 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 per mile Job support por job The company recently completed a 600 square foot carpet-cleaning job at the Flying N Ranch-a 59-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 $141.30 (6 hundred square feet @ $23.55 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
