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 $11.65 per hundred square metres. However, there is some question about whether the company is actually making any money on jobs for some customersparticularly 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 (00s)	38,725	hundred square metres
Travel to jobs	Kilometres driven	17,650	kilometres
Job support	Number of jobs	250	jobs
Other (costs of idle capacity and organization-sustaining costs)	None	NA

The total cost of operating the company for the year is $427,500, which includes the following costs:

Wages	$	165,000
Supplies		42,500
Snow removal equipment depreciation		22,500
Vehicle expenses		42,500
Office expenses		65,000
President's compensation		90,000
Total cost	$	427,500

Resource consumption is distributed across the activities as follows:

	Distribution of Resource Consumption across Activity Cost Pools
	Snow Removal	Travel to Jobs	Job Support	Other	Total
Wages		80	%		10	%		0	%		10	%		100	%
Supplies		100	%		0	%		0	%		0	%		100	%
Snow removal equipment depreciation		85	%		0	%		0	%		15	%		100	%
Vehicle expenses		0	%		65	%		0	%		35	%		100	%
Office expenses		0	%		0	%		45	%		55	%		100	%
President's compensation		0	%		0	%		35	%		65	%		100	%

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.(Do not leave any empty spaces; input a 0 wherever it is required.)

2.Compute the activity rates for the activity cost pools.(Round your answers to 2 decimal places.)

3.The company recently completed a 4,000-square-metre snow removal job at Hometown Hardwarea 80-kilometre round-trip journey from Kenosha's offices. Compute the cost of this job using the ABC system.(Round your answers to 2 decimal places.)

4.The revenue from the Hometown Hardware job was $466.00 (4,000 square metres at $11.65 per hundred square metres). Make a report showing the margin from this job.(Round your answers to 2 decimal places.)

References

07-02 Assign costs to cost pools using a first-stage allocation, and compute activity rates.

07-03 Assign costs to a cost object using a second-stage allocation.

07-04 Use activity-based costing to compute product and customer margins.