Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Prepare the first-stage allocation of costs to the activity cost pools. The company recently completed a 400 square foot carpet-cleaning job at the Flying N

image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
Prepare the first-stage allocation of costs to the activity cost pools. The company recently completed a 400 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. (Round your intermediate calculations and final answer to 2 decimal places.) Compute the activity rates for the activity cost pools. (Round your answers to 2 decimal place Resource consumption is distributed across the activities as follows: Job support consists of recelving 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 400 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 $89.80 (400 square feet $22.45 per hundred square feet). Calculate the customer margin eamed on this job. The revenue from the Flying N Ranch was $89.80 ( 400 square feet @ $22.45 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.) 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 $22.45 per hundred square feet. However, there is some question about whether the company is actually making any money on jobs for some customersparticularly 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: The total cost of operating the company for the year is $340,000 which includes the following costs: Resource consumption is distributed across the activities as follows

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored 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

Recommended Textbook for

More Books

Students also viewed these Accounting questions

Question

What are the states of consciousness?

Answered: 1 week ago