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Managerial accounting please help Gallatin Carpet Cleaning is a small, family-owned business operating out of Bozeman, Montana. For its services, the company has always charged

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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 $22.65 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, a simple system 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 Cleaning carpets Square feet cleaned (00s) 14,500 hundred square feet Travel to jobs Miles driven 215,000 miles Job support Number of jobs Other (costs of idle capacity and 2,000 jobs organization-sustaining costs) Not applicable The total cost of operating the oompany for the year is $367,000, which includes the following costs: Wages 150,000 Cleaning supplies 20,000 Cleaning equipment depreciation 13,000 Vehicle expenses 32,000 69,000 Office expenses President's compensation 83,000 Total cost 367,000

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