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please show calculations and answers clearly. Question 5: (25 points) company has always charged a flat fee per hundred square feet of carpet cleaned. The
please show calculations and answers clearly.
Question 5: (25 points) company has always charged a flat fee per hundred square feet of carpet cleaned. The current per hundred square feet. However, there is some question about whether the company is king any money on jobs for some customers-particularly those located on remote ranches arpet Cleaning is a small, family-owned business operating out of Bozeman, Montana. For its services, the fee is $23.95 hat require considera suggested investigating this question using activity-based costing. After some discussion, s simple system consisting of four activity cost pools. The activity cost pools and their activity m appear below: ble travel time. The owner's daughter, home for the summer from college, has he designed a easures Activity for the Year hundred square Activity Measure Square feet cleaned (00s) Miles driven Number of jobs Activity Cost Pool Cleaning carpets Travel to jobs Job support Other (organization-sustaining costs and idle 9,000 feet 110,500 miles 2,100 jobs Not applicable capacity costs) None The total cost of operatin g the company for the year is $351.000 which includes the following costs: Wages Cleaning supplies Cleaning equipment depreciation Vehicle expenses Office expenses President's compensation Total cost S145,000 26,000 11,000 33,000 65,000 71,000 $351,000 Resource consumption is distributed across the activities as follows: Distribution of Resource Consumption Across Activities Travel to Jobs Job Support 0% 0% 0% 0% Other 15% 090 27% 19% 40% 66% Total 100% 100% 100% 100% 100% 100% Cleaning Carpets Cleaning supplies Cleaning equipment depreciation Vehicle expenses Office expenses President's compensation 70% 100% 73% 0% 0% 0% 15% 0% 090 81% 0% 0% 090 60% 34% 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.(9 points) 2. Compute the activity rates for the activity cost pools. (5 points) 3. The company recently completed a 400 square foot carpet-cleaning job at the Flying N Ranch a 51-mile round-trip journey from the company's offices in Bozeman. Compute the cost of this job using the activity-based costing system. (6 points) The revenue from the Flying N Ranch was $95.80 (400 square feet @ $23.95 per hundred square feet). Calculate the customer margin carned on this job. 5 points) 4Step by Step Solution
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