Please complete sections 1-4. Thank you!
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, she designed a simple system consisting of four activity cost pools, The activity cost pools and their activity measures appear below: Activity Measure Activity for the Year Activity Cost Pool Square feet cleaned (00s) 13 , 500 hundred square feet Cleaning carpets 147, 500 miles Travel to jobs Miles driven Number of jobs 1, 800 jobs Job support Other (organization-sustaining costs and None Not applicable idle capacity costs) The total cost of operating the company for the year is $347,000 which includes the following costs: Wages 138,000 Cleaning supplies 30 ,000 Cleaning equipment depreciation 11,000 Vehicle expenses 28,000 Office expenses 56, 000 President's compensation 74, 000 Total cost $ 347,000 Resource consumption is distributed across the activities as follows: Distribution of Resource Consumption Across Activities Cleaning Travel Job Carpets to Jobs Support Other Total Wages 798 12 98 1008 Cleaning supplies 1009 1008 Cleaning equipment depreciation 1008 Vehicle expenses 78 22 100% office expenses 0 8 108 613 398 1008 President's compensation 301 70 1008 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 200 square foot carpet-cleaning job at the Flying N Ranch-a 53-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 $45.30 (200 square feet @ $22.65 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 Prepare the first-stage allocation of costs to the activity cost pools. Cleaning Travel to Carpets Jobs Job Support Other Total Wages $ 0 Cleaning supplies Cleaning equipment depreciation Vehicle expenses Office expenses President's compensation Total cost $ O $ 0 $ 0 $ O $
