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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 $24.00 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, she designed a simple system consisting of 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 (005) 12,000 hundred square feet Travel to jobs Miles driven 64,500 miles Job support Number of jobs 2,000 Jobs Other (organization-sustaining costs and idle capacity costs) Not applicable None The total cost of operating the company for the year is $369,000 which includes the following costs: Wages Cleaning supplies Cleaning equipment depreciation Vehicle expenses office expenses President's compensation Total cost $ 139,000 23,000 19,000 34,000 70,000 84,000 $ 369,000 Resource consumption is distributed across the activities as figillows: Distribution of Resource Consumption Across Activities Cleaning Travel Job Carpets to Jobs Support Wages 710 158 08 Cleaning supplies 1008 08 cleaning equipment depreciation 705 00 Vehicle expenses os office expenses 598 President's compensation OS 00 Other 148 09 300 166 00 00 Total 1000 1000 1000 1000 1000 1008 05 00 08 28 720 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. 2. Compute the activity rates for the activity cost pools. 3. The company recently completed a 600 square foot carpet-cleaning job at the Flying N Ranch-a 60-mile round-trip journey from 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 $144.00 (600 square feet @ $24.00 per hundred square feet). Calculate the customer margin earned on this job. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Other Total Prepare the first stage allocation of costs to the activity cost pools. Cleaning Travel to Carpets Jobs Job Support Wages Cleaning supplies Cleaning equipment depreciation Vehicle expenses Office expenses President's compensation Total cost Required Required 2 > 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 Rate Activity Cost Pool Cleaning carpets Travel to jobs Job support per hundred square feet per mile per job Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Riquired 4 The revenue from the Flying N Ranch was $144.00 (6 hundred square feet @ $24.00 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
