Kenosha Winter Services is a small, family-owned snow-removal business. For its services, the company has always charged a fiat fee per hundred square metres of snow removal. The current fee is $12.30 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 Cont. Pool Activity Measure Activity for the Year Snow removal square metron cleaned (008) 38,000 hundred square metres Travel to joba Xilometres driven 27,380 kilometres Job support Number of jobs 200 Jobs Other (costs of idle capacity and organisation-sustaining conta) None NA The total cost of operating the company for the year is $472,500, which includes the following costs: Wages Supplies Snow removal equipment depreciation Vehicle expenses office expenses President's compensation $183,000 45,500 25,500 45,500 71,000 102,000 Total cont $472,500 Resource consumption is distributed across the activities as follows: Distribution of Resource Consumption across Activity Cost Poole Wagen Supplies Snow removal equipment depreciation Vehicle expenses office expenses Presidente compensation Snow Removal 701 1001 80 08 08 os Travel to Jobs 200 08 ON 701 09 01 Job Support 00 08 00 ON 400 451 Other 100 Os 200 304 Total 1008 1004 1001 1004 1008 1000 55 Job support consists of receiving calls 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 cost pools. (Do not leave any empty spaces; input a 0 wherever it is required.) Snow Removal Travel to Jobs Job Support Other Total $ 0 Wages Supplies 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 O wherever It Is required.) Snow Removal Travel to Jobs Job Support Other Total $ 0 0 0 Wages Supplies Snow removal equipment depr. Vehicle expenses Office expenses President's compensation Total cost OOOO $ 0 S 0 $ 0 $ 0 en 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 4,600-square-metre snow removal job at Hometown Hardware-a 86-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.) ABC Cost Activity Cost Pool Snow removal Travel to jobs Job support Total S 0.00 4. The revenue from the Hometown Hardware job was $565.80 (4,600 square metres at $12.30 per hundred square metres). Prepare a report showing the margin from this job. (Round your answers to 2 decimal places.) Sales Costs: Snow removal Travel to jobs Job Support Product margin 0.00 0.00 $
