Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

heducation.com/hm.tpx 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

image text in transcribed
image text in transcribed
image text in transcribed
heducation.com/hm.tpx 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 $23.60 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 fronm has suggested investigating this question using activity-based costing, After some discussion, a simple system consisting of four activity cost pools seemed to be adequate. The activity cost pools and their activity measures appear below Cleaning carpets Travel to jobs Job support Other (costs of idle capacity and Square feet cleaned (00s) Miles driven Number of jobs 12,000 hundred square feet 172,500 miles 2,000 jobs organization-sustaining costs) None Not applicable The total cost of operating the company for the year is s337.000, which includes the following costs: 145,000 26,000 Cleaning equipment depreciation 800 Cleaning supplies Vehicle expenses Office expenses 28,000 57.000 73,000 Total cost $ 337.000 Resource consumption is distributed across the activities as follows Distribution of Resource Consumption Across Activities Cleaning Travel toJob Wages Cleaning supplies Cleaning equipment depreciation Vehicle expenses Ofice expenses President's compensation CarpetsJobs 0% 75% 0% SupportOthr 13% 096 28% 096 25% 39% 31% 69% Total 100% 100% 100% 100% 100% 100% 72% 100% 72% 0% 0% 0% 61% Job support consists of receiving calls from potental customers at the home office, scheduling jobs, biling. resolving issues, and so on Required: 1 Prepare the first-stage allocation of costs to the activity cost pools Answer is complete and correct. Cleaning Carpets 5 104,400S 21,750s Travel to Support Other Total Wages s18,850$ 145.000 G

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

Front Office Operations And Night Audit Workbook

Authors: Patrick J. Moreo, Gail Sammons, Jim Dougan, James Dougan

1st Edition

0133987698, 978-0133987690

More Books

Students also viewed these Accounting questions