Answered step by step
Verified Expert Solution
Question
1 Approved Answer
in Problems (GRADED) Seved Help Save & Exit Submit 5 0 oints Check my work Gallatin Carpet Cleaning is a small, family-owned business operating out
in Problems (GRADED) Seved Help Save & Exit Submit 5 0 oints Check my work 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 $22.55 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 Cost Pool Activity Measure Activity for the Year Cleaning carpets Square feet cleaned (003) 9.500 hundred square feet Travel to jobs Milos driven 339,000 miles Job support Number of jobs 2,000 Jobs Other (organization-sustaining conta and idle capacity costs) None Not applicable Book Print References The total cost of operating the company for the year is $367,000 which includes the following costs: Wages cleaning supplies Cleaning equipment depreciation Vehicle expenses office expenses President's compensation Total cost $ 150,000 22.000 15,000 30,000 67,000 83,000 $367,000 Resource consumption is distributed across the activities as follows: raw al ! W 9 MacBook Help Save & Exit Submit 5 Check my work Resource consumption is distributed across the activities as follows: Distribution of Resource Consumption Aerons Activities Cleaning Travel Carpets to Jobs Wages 798 113 cleaning supplies 1001 08 Cleaning equipment depreciation 08 666 Vehicle expenses 08 788 office expenses O 08 President's compensation 08 08 Ints Job Support ot 0 00 0 648 328 Other 100 08 340 220 368 688 Total 1000 1000 1000 1005 1000 1001 eBook Print Job support consists of receiving calls from potential customers at the home office, scheduling jobs, billing, resolving issues, and so Ceferences 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 800 square foot carpet-cleaning job at the Flying N Ranch-a 57-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 $180.40 (800 square feet @ $22.55 per hundred square feet). Calculate the customer margin earned on this job. Complete this question by entering your answers in the tabs below. g MacBook
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started