Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

mework Saved Hel Gallatin Carpet Cleaning is a small, family-owned business operating out of Bozeman, Montana. For its services, the company always charged a flat

image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
mework Saved Hel Gallatin Carpet Cleaning is a small, family-owned business operating out of Bozeman, Montana. For its services, the company always charged a flat fee per hundred square feet of carpet cleaned. The current fee is $23.90 per hundred square feet. Hov there is some question about whether the company is actually making any money on jobs for some customers-particularly t located on remote ranches that require considerable travel time. The owner's daughter, home for the summer from college, suggested investigating this question using activity-based costing. After some discussion, she designed a simple system con 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 (80) 9,580 hundred square feet Travel to jobs Miles driven 165,500 miles Job support Number of jobs 2,100 jobs Other (organization-sustaining costs and idle capacity costs) Not applicable None The total cost of operating the company for the year is $374,000 which includes the following costs: $ Wages Cleaning supplies Cleaning equipment depreciation Vehicle expenses office expenses President's compensation Total cost 149,000 32,000 20,000 39,000 60,000 74,000 374,000 $ esource consumption is distributed across the activities as follows: mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https%253A%252F%252Fpalmbeach Homework Seved Urtice expenses President's compensation Total cost b0,0 74,000 $ 374,000 Resource consumption is distributed across the activities as follows: Distribution of Resource Consumption Across Activities Cleaning Travel Carpets to Jobs Wages 77% 15% Cleaning supplies 100% 0% Cleaning equipment depreciation 71% 0% Vehicle expenses 0% office expenses 0% President's compensation 0% 0% Job Support 0% % ex ex 57% 34% Other 8% 0% 29% 23% 43% 66% Total 100% 100% 100% 100% 100% 100% 77% 0% Job support consists of receiving calls from potential customers at the home office, scheduling jobs. on. Required: Prepare the first stage allocation of costs to the activity cost pools. 2. Compute the activity rates for the activity cost pools. 2. The company recently completed a 400 square foot carpet-cleaning job at the Flying N Ranch-a he company's offices in Bozeman Compute the cost of this job using the activity-based costing sys The revenue from the Flying N Ranch was $95.60 (400 square feet @ $23.90 per hundred squar margin earned on this job. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Prepare the first stage allocation of costs to the activity cost pools. Cleaning Carpets Travel to Jobs Job Support Other Total 0 0 Wages Cleaning supplies Cleaning equipment depreciation Vehicle expenses Office expenses President's compensation Total cost 0 0 0 $ 0 $ 0 $ 0 $ 0 $ 0 Required 2 > Prey 2 of 2 HE Next Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Compute the activity rates for the activity cost pools. (Round your answers to 2 decimal places.) Activity Cost Pool Cleaning carpets Travel to jobs Job support Activity Rate per hundred square feet per mile per job ound-trip the cost of this job using the activity-based costing system 4. The revenue from the Flying N Ranch was $95.60 (400 square feet @ $23.90 per hundred square feet). Calculate the margin earned on this job Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 The company recently completed a 400 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. (Round your intermediate calculations and final answer to 2 decimal places.) Cost of the job Coupon 2. Compute the activity rates for the activity cost pools 3. The company recently completed a 400 square foot carpet-cleaning job at the Flying N Ranch-a 57-mile round-trip je 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 $95.60 (400 square feet @ $23.90 per hundred square feet). Calculate the margin earned on this job. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required The revenue from the Flying N Ranch was $95.60 (4 hundred square feet @ $23.90 per hundred square feet). Calculate the customer margin earned on this job. (Negative customer margins should be indicated with a minus sign. Round your intermediate calculations and final answers to 2 decimal places.) Customer margin

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Accounting questions