Kenosha Winter Services is a small, family-owned snow-removal business. For its services, the company has always charged a flat fee per hundred square metres of snow removal. The current fee is $11.60 per hundred square metres. However, there is some question about whether the company is actually making any money on jobs for some customers-particularly those located on more remote properties that require considerable travel time. The owner's daughter, home from school for the summer has suggested investigating this question using ABC. 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: Activity Cost Pool Activity Measure Activity for the Year Snow removal Square metres cleaned (ees) 42,ese hundred square metres Travel to jobs Kilometres driven 15,875 kilometres Job support Number of jobs 400 jobs Other (costs of idle capacity and organization-sustaining costs) None NA The total cost of operating the company for the year is $465.000, which includes the following costs: Wages Supplies Snow removal equipment depreciation Vehicle expenses office expenses President's compensation $180,00 45,000 25,00 45.000 78,00 10,000 Total cost $455,000 Resource consumption is distributed across the activities as follows: Distribution of Resource Consumption across Activity Cost Pools Snow Renovat Travel to Jobs 10% Job Support ex BE Other 10 Total 100 100% Wages Supplies Snow removal equipment depreciation Vehicle expenses Office expenses President's compensation UN 653 os 154 35% SSX 100 10 ex 41 35 10 Job support consists of receiving cals from potential customers at the home office, scheduling jobs,billing, resolving issues, and so on Requirect 1. Prepare the first stage allocation of costs to the activity cott pools. (Do not leave any empty spaces: Inpute o wherever it's required.) Travel to Jobs Job Support Snow Removal $124.800 Other Total 5 124 100 0 Wages Supplies Snow removal met de Vehicle expenses Orice penses President's compensation Totalcoat 0 $124 3005 09 O $124.800 2. Compute the activity rates for the activity cost pools. (Round your answers to 2 decimal places.) Activity Cost Pool Snow removal Travel to jobs Job support Activity Rate per hundred square metres per kilometre per job 3. The company recently completed a 4.500-square-metre snow removal job at Hometown Hardware-a 85-kilometre round-trin journey from Kenosha's offices. Compute the cost of this job using the ABC system. (Round your answers to 2 decimal places.) ABC Cost Activity Cost Pool Snow removal Travel to jobs Job Support Total $ 0.00 4. The revenue from the Hometown Hardware job was $522.00 (4.500 square metres at $11.60 per hundred square metres) Prepare a report showing the margin from this job. (Round your answers to 2 decimal places) Sales Costs Snow remova Travel to jo Job Support Product margin 0.00 $ 0.00
